United States v. 150 Acres of Land ( 2000 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0033P (6th Cir.)
File Name: 00a0033p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
;

UNITED STATES OF AMERICA,

Plaintiff-Appellee,


No. 98-3160
v.

>
150 ACRES OF LAND, More or 


Less, Located in Medina
Defendant-Appellant. 
County, Ohio,

1
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 95-01009—Solomon Oliver, Jr., District Judge.
Argued: April 29, 1999
Decided and Filed: January 20, 2000
Before: JONES, BOGGS, and COLE, Circuit Judges.
_________________
COUNSEL
ARGUED: David S. Hoffmann, McMAHON, DeGULIS &
HOFFMAN, Cleveland, Ohio, for Appellant. Jared A.
Goldstein, U.S. DEPARTMENT OF JUSTICE, LAND &
NATURAL RESOURCES DIVISION, Washington, D.C., for
1
2 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 27
Appellee. ON BRIEF: David S. Hoffmann, McMAHON, property into appropriate units based on reasonable divisions
DeGULIS & HOFFMAN, Cleveland, Ohio, for Appellant. and the bounds of contamination present on the property. In
Jared A. Goldstein, James D. Freeman, U.S. DEPARTMENT the present case, I would hold that the facility is limited to
OF JUSTICE, LAND & NATURAL RESOURCES Parcel 1, based on the divisibility of the property into natural
DIVISION, Washington, D.C., for Appellee. units and the admission that no contamination was found
outside of Parcel 1, and thus I would hold that the lien is
BOGGS, J., delivered the opinion of the court. JONES, J. proper only as it pertains to Parcel 1.
(p. 23), delivered a separate concurring opinion. COLE, J.
(pp. 24-27), delivered a separate opinion concurring in part For the foregoing reasons, I respectfully DISSENT from
and dissenting in part. Part II. C. of the majority opinion.
_________________
OPINION
_________________
BOGGS, Circuit Judge. The federal Environmental
Protection Agency (“EPA”) sued the Glidden Co. in
personam and certain land owned by various members of the
Bohaty family in rem under the Comprehensive
Environmental Response, Compensation, and Liability Act
(“CERCLA”), 42 U.S.C. § 9601 et seq., in connection with
costs incurred in removing toxic wastes found on the land.
Glidden settled with the EPA for a small fraction of the clean-
up costs, and the Bohatys and the government cross-moved
for summary judgment. The district court granted summary
judgment for the government, thereby perfecting a lien on the
property under 42 U.S.C. § 9607(l)(1). The Bohatys now
appeal the judgment of the district court ordering the sale of
the land and directing that the proceeds be used to satisfy the
lien on the property. We reverse the judgment of the district
court in part, affirm in part, and remand the case for further
proceedings.
I
The land in question is approximately 150 contiguous acres
of real estate in three parcels, located on Pearl Road in
Medina County, Ohio. It has been owned “for at least three
generations” by the Bohaty family, which has operated a
farm-equipment repair business at the extreme western edge.
26 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 3
389, 395-96 (E.D. Va. 1994) (stating that what “matters for According to the district court’s opinion, at the present time,
the purpose of defining the scope of the facility is where the Ethel Bohaty owns a 37/45 interest, and John Bohaty, Jr.,
hazardous substances were . . . disposed of . . . or have Barbara Bohaty, Belinda Bohaty, and Susan Bohaty each own
otherwise come to be located” and “the uncontradicted record a 2/45 interest in the land. Each interest was entirely inherited
confirms that hazardous substances exist . . . in all quadrants except for that part of Ethel Bohaty’s interest that is 12/45 of
of the property”) (footnotes and internal quotations omitted). the land, which she purchased from relatives whose interests
In essence, the scope of contamination determined the scope descended at the same time as her husband’s. Ethel’s father-
of the facility. in-law, John Bohaty, died on April 12, 1982, leaving one-half
interest in the property to her husband Vencel (John), the
Conversely, where the Fourth Circuit found that interests now owned by John, Jr., Barbara, Belinda, and Susan
contamination was not widespread, the court limited the to them, and the remainder to three other relatives. On
“facility” to include only the area where hazardous substances January 27, 1984, Vencel died, leaving his entire interest to
were located. See, e.g., Nurad, Inc. v. William E. Hooper & Ethel. On February 15, 1985, the three other relatives or their
Sons Co., 966 F.2d 837, 843 (4th Cir. 1992) (stating that “the heirs sold their interests to Ethel.
only ‘area’ where hazardous substances [had] ‘come to be
located’ was in and around the storage tanks, so the relevant On March 30, 1987, the local fire department noticed
‘facility’ [was] properly confined to that area”). numerous fifty-five gallon drums on the property and notified
the Ohio Environmental Protection Agency (“OEPA”).
This case presents land that is geographically distinct and OEPA visited the property and noted approximately 300
while used in part as a dumping site, is admittedly not abandoned drums containing paint waste, laboratory
contaminated in its entirety. It is clear that no contamination chemicals, and red sludge. OEPA’s toxicity tests were
was discovered outside of Parcel 1. Following this court’s negative. Ethel Bohaty stated that she asked the inspectors to
approach in Brighton and applying § 9601(9)(B), the facility inform her if the drums posed a problem, and that she did not
under these facts should be limited to Parcel 1; the area of the hear from them.
entire contamination that is reasonably and naturally separable
from Parcels 2 and 3. On August 17, 1989, OEPA again inspected the property in
connection with the City of Medina’s appropriation of four
Where the contamination is confined to a single parcel and acres for road construction. The inspection was not related to
there is no indication that dumping has occurred on connected the 1987 inspection. Ethel Bohaty expressed her desire to get
parcels, this court should look to the metes and bounds of the rid of any toxic substances that might be found. The
contamination as a measure, at least in part, when defining the inspectors found 200–300 drums, some of which were cause
scope of the “facility” under 42 U.S.C. § 9601(9). Cf. for concern, and five underground storage tanks; they
Brighton, 153 F.3d at 313 (relying on scope of suggested a follow-up inspection in the fall, when the
contamination); Axel Johnson, Inc., 191 F.3d at 418-19 vegetation would be less dense. The inspectors concluded,
(examining scope of contamination and divisibility of land); from historical aerial photographs, that organized drum
Nurad, Inc., 966 F.2d at 843 (relying on scope of placement had occurred from the mid-1950s through the early
contamination). If we are to apply the statutory language 1970s. Ethel Bohaty stated that the inspectors did not tell her
defining the “facility” under § 9601(9) and follow the that the drums contained hazardous materials or that she
teachings of Brighton with respect to limiting the “facility” at should remove them or take other precautions, and that OEPA
all, this case presents a clear opportunity to divide the
4 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 25
did not contact her further regarding the August 1989 records, were transferred on the same land deed, and were
inspection. maintained in similar undeveloped states. These factors are
not determinative of the bounds of the facility. The words of
On September 16, 1991, OEPA requested assistance from the statute direct our inquiry to the determination of the
the federal EPA. In October 1991, the EPA asked to inspect bounds of the “site or area where a hazardous substance has
the property. On October 8, 1991, EPA inspectors conducted been deposited, stored, disposed of, or placed, or otherwise
a preliminary inspection that identified approximately 400 come to be located.” 42 U.S.C. § 9601(9)(B). The case law
drums. Later that afternoon, the inspectors took soil samples conforms to this directive.
from various parts of the property. Laboratory analysis
revealed that each of the samples exhibited flashpoints of less In Brighton, this court determined that the entire property
than 130 degrees Fahrenheit, therefore posing an ignitability was the “facility” in part because “it appear[ed] that the entire
hazard, as well as substantially acidic pH values. The EPA property was operated together as a dump.” 153 F.3d at 313.
considered these results sufficient to justify a removal action Judge Moore, concurring in the result in Brighton, concluded
under 40 C.F.R. § 300.415(b)(2). that the entire property was the facility because § 9601(9)(B)
defined a “landfill” in its entirety as constituting a “facility”
The government presented evidence that Vencel Bohaty, and this court did not need to decide the bounds of the
Ethel’s husband (now deceased) knew of the dumping and contamination under § 9601(9)(B) to designate the entire
may have profited from it.1 The living Bohatys presented property as the facility. Id. at 323 (Moore, J. concurring in
unrebutted evidence that they did not know of the presence of result). Thus, in Brighton this court reasoned that land which
drums on the property, other than those used in the farm- was used overall as a dumping site – thus, the land was
equipment repair business. Except for the extreme western widely contaminated – and was not geographically distinct
edge of the property, the land was heavily vegetated, could not be divided into reasonable or natural separate
especially the area containing the drums. In fact, EPA facilities. See id. at 313 (Judge Boggs’s reasoning on defining
inspectors often could not see the drums until they stumbled the scope of facility), 323 (Judge Moore’s concurrence relying
on them. on statutory language to define “facility”).
On December 16, 1991, the EPA sent John and Ethel Similarly, courts faced with widely contaminated land have
Bohaty a notice of potential liability asking them to agree to refused to divide the land into separate facilities even when
pay for the response activities. The notice requested a divisible into separate units. See, e.g., Axel Johnson, Inc. v.
response within five days. The Bohatys did not respond to the Carroll Carolina Oil Co., 191 F.3d 409, 418-19 (4th Cir.
notice. 1999) (holding that widespread contamination scattered
throughout the property prevented limiting the facility to the
On January 15, 1992, the EPA began a removal operation particular functional units simply because the property could
on the property. Altogether, approximately 1000 drums were be divided into those units); Akzo Coatings, Inc. v. Aigner
removed, of which approximately 550 contained waste and Corp., 960 F. Supp. 1354, 1358 (N.D. Ind. 1996) (rejecting
the argument that because the “Site can be divided into five
distinct geographic areas, each area is a distinct facility” and
1
The EPA regional judicial officer found that the Bohatys had raised holding that hazardous waste had “otherwise come to be
credibility issues concerning several affidavits and depositions proffered located in several locations at the Site”); Northwestern
by the government in support of this claim “that defeat their usefulness to Mutual Life Ins. Co. v. Atlantic Research Corp., 847 F. Supp.
the EPA.”
24 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 5
_______________________________________________ approximately 450 were empty. The removal was completed
on May 7, 1992. The estimated cost under control of the on-
CONCURRING IN PART, DISSENTING IN PART scene coordinator was $652,720. The district court ultimately
_______________________________________________ determined that the costs and damages incurred by the
government were $854,426.87. The Bohatys assert that a
large underground storage tank was removed, although the
R. GUY COLE, JR., Circuit Judge, Concurring in Part and on-scene coordinator’s report does not indicate such activity.
Dissenting in Part. I concur in the majority’s decision in Parts
II. A, B, D and E. Because I believe that Parcel 1, the parcel The removal activities were confined to Parcel 1 of the
at issue, is geographically separable by a reasonable and property. The EPA inspected Parcels 2 and 3 visually and
natural division from the multiple non-contaminated parts, I with a magnetometer for surface and subsurface drums, and
find that Parcel 1 is the appropriate facility under 42 U.S.C. found nothing to remove.
§ 9601(9)(B). Therefore, I respectfully DISSENT from Part
II. C of the majority’s opinion. On May 5, 1995, just before the three-year statute of
limitations expired, see 42 U.S.C. § 9613(g)(2)(A), the
As Judge Boggs noted in United States v. Township of government brought an in personam action against the
Brighton,1 “a facility should be defined at least in part by the Glidden Company and an in rem action against the Bohatys’
bounds of the contamination.” 153 F.3d 307, 313 (6th Cir. three parcels of land to recover the cost of the removal
1998). In Brighton, Judge Boggs reasoned that an area that activity. The government executed a consent agreement with
cannot be reasonably or naturally divided into multiple parts Glidden resolving the claims against Glidden for $60,000,
or functional units should be defined as a single facility, even leaving the Bohatys as the only defendants in this action. See
if it contains parts that are non-contaminated. See id. at 313. 61 Fed. Reg. 29763. The government and the Bohatys both
Conversely, where property is reasonably and naturally moved for summary judgment. On September 30, 1997, the
divisible into contaminated and non-contaminated parts, a district court granted the government’s motion, denied the
court can limit the facility to the contaminated portions of the Bohatys’ motion, and entered judgment “for the Plaintiff and
property. In this case, the evidence shows that the three against the Defendants.” The Bohatys appealed to this court,
parcels have distinct legal descriptions and can be reasonably but voluntarily dismissed their appeal without prejudice,
divided into multiple parts, separating the contaminated from apparently on the ground that the order entered by the district
the non-contaminated parts. court was not a final judgment. The government, unopposed
by the Bohatys, then moved the district court to modify its
The majority emphasizes the fact that the parcels were order and judgment entry. On January 26, 1998, the district
never considered separate for any purpose other than land court granted the motion and entered both an order modifying
its previous judgment and order and a concurrent order of
sale. Enforcement of the orders is stayed pending this appeal.
1
The Brighton court produced a divided opinion where Judge Boggs
wrote for the court, Judge Moore concurred only in the result and Judge In related proceedings, on February 13, 1996, the EPA
Dowd concurred in part and dissented in part. 153 F.3d 307 (6th Cir. issued a de minimis order on consent addressing the potential
1998). In sum, the reasoning of the Brighton court differs according to liability of nine parties with regard to the Bohaty property. 61
the opinion of each of Judge, while the result is the product of the court.
Accordingly, references to the Brighton opinion refer to the reasoning of Fed. Reg. 5550. Ashland Chemical Company, Dow Chemical
the individual Judges where appropriate and not to the reasoning of the Company, General Motors Corporation, Quaker Oats
court.
6 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 23
Company, State Chemical Manufacturing Company, Inc., ________________________
Synthetic Products Company, Uniroyal Chemical Company,
Inc., and Upjohn Company were each assessed $1,050 in CONCURRENCE
satisfaction of past and future claims connected with the ________________________
Bohaty site. Ibid.
NATHANIEL R. JONES, Circuit Judge, concurring. While
II I agree with the majority that the district court’s construction
of “disposal” for the purposes of 42 U.S.C. § 9601(35)(A) is
A. The Structure of the CERCLA Defenses overly expansive, the majority’s interpretation is too narrow.
The majority limits “disposal” to “spills occurring by human
The basic liability structure under CERCLA is set forth at intervention.” Ante at ___. This language seemingly restricts
42 U.S.C. § 9607(a): “disposal” to occasions where property owners release toxic
substances themselves, or actively participate in exacerbating
Notwithstanding any other provision or rule of law, existing spills. The result is to potentially provide unjustified
and subject only to the defenses set forth in subsection cover for spectator polluters, who are aware of past and
(b) of this section— ongoing toxic releases, yet do nothing to remedy them.
(1) the owner and operator of a . . . facility, [and] Accordingly, I construe “disposal” under § 9601(35)(A) to
(2) any person who at the time of disposal of any encompass spills produced by human agency, including those
hazardous substance owned or operated any facility at precipitated by willful neglect. This construction conveys the
which such hazardous substances were disposed of, “active” component of “disposal,” yet still provides room for
. . . shall be liable for— actions that are not affirmatively interventionist, but
(A) all costs of removal or remedial action incurred by sufficiently assertive to fall outside the bounds of the
the United States Government or a State or an Indian CERCLA defense regime. I concur in the court’s judgment
tribe not inconsistent with the national contingency plan; and in all other aspects of Judge Boggs’ opinion.
....
Ibid. The CERCLA defenses are:
(b) Defenses
There shall be no liability under subsection (a) of this
section for a person otherwise liable who can establish by
a preponderance of the evidence that the release or threat
of release of a hazardous substance and the damages
resulting therefrom were caused solely by—
....
(3) an act or omission of a third party other than an
employee or agent of the defendant, or than one whose
act or omission occurs in connection with a contractual
relationship, existing directly or indirectly, with the
defendant . . . , if the defendant establishes by a
preponderance of the evidence that (a) he exercised due
22 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 7
government’s actions. The Bohatys have not presented care with respect to the hazardous substance concerned,
evidence that filing the lawsuit influenced the RJO’s decision; taking into consideration the characteristics of such
in addition, the lawsuit itself may be construed as part of the hazardous substance, in light of all relevant facts and
process afforded to the Bohatys. The district court is correct. circumstances, and (b) he took precautions against
The Bohatys received sufficient due process. foreseeable acts or omissions of any such third party and
the consequences that could foreseeably result from such
III acts or omissions.
The Bohatys have raised a genuine issue of material fact as 42 U.S.C. § 9607(b). The CERCLA definitions state:
to each element of the CERCLA “innocent landowner”
defense, and are therefore entitled to have that defense survive (35)(A) The term “contractual relationship”, for the
summary judgment. They have not, however, raised a purpose of section 9607(b)(3) of this title, includes, but
genuine issue of material fact as to whether any lien that may is not limited to, land contracts, deeds or other
be proper covers Parcels 2 and 3, the district court’s finding instruments transferring title or possession, unless the
on the amount of costs that are recoverable if liability is real property on which the facility concerned is located
established, or the due process claim. was acquired by the defendant after the disposal or
placement of the hazardous substance on, in, or at the
For the foregoing reasons, the judgment of the district court facility, and one or more of the circumstances described
with respect to the innocent landowner defense is in clause (i), (ii), or (iii) is also established by the
REVERSED and the case is REMANDED to the district defendant by a preponderance of the evidence:
court for further proceedings consistent with this opinion. (i) At the time the defendant acquired the facility the
The judgment of the district court is AFFIRMED in all other defendant did not know and had no reason to know that
respects. any hazardous substance which is the subject of the
release or threatened release was disposed of on, in, or at
the facility.
....
(iii) The defendant acquired the facility by inheritance
or bequest.
In addition to establishing the foregoing, the defendant
must establish that he has satisfied the requirements of
section 9607(b)(3)(a) and (b) of this title.
(B) To establish that the defendant had no reason to
know, as provided in clause (i) of subparagraph (A) of
this paragraph, the defendant must have undertaken, at
the time of acquisition, all appropriate inquiry into the
previous ownership and uses of the property consistent
with good commercial or customary practice in an effort
to minimize liability. For purposes of the preceding
sentence the court shall take into account any specialized
knowledge or experience on the part of the defendant, the
8 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 21
relationship of the purchase price to the value of the Furthermore, there is no evidence in the record that removing
property if uncontaminated, commonly known or the empty drums raised the costs significantly. There is also
reasonably ascertainable information about the property, no evidence in the record on appeal that an underground tank
the obviousness of the presence or likely presence of was removed. Nor is there evidence that the empty drums
contamination at the property, and the ability to detect would have been accepted by an ordinary landfill, or that such
such contamination by appropriate inspection. disposition would have been less costly than the actual
.... disposition. Accordingly, the decision of the district court as
(D) Nothing in this paragraph shall affect the liability to the amount of the cleanup costs is affirmed.
under this chapter of a defendant who, by any act or
omission, caused or contributed to the release or E. Due Process
threatened release of a hazardous substance which is the
subject of the action relating to the facility. Relying on Reardon v. United States, 947 F.2d 1509 (1st
Cir. 1991), the Bohatys argue that the lien on their property
42 U.S.C. § 9601. violates their Fifth Amendment due process rights. The
district court agreed that the lien deprived the Bohatys of a
Based on these provisions, the framework for considering significant property interest, but held that the Bohatys were
the Bohatys’ liability is this: The present owners of a afforded sufficient due process. The district court was
“facility” are liable for the costs incurred in removing toxic correct.
substances from the facility, unless
To determine what process is due, we consider (1) the
(1) they can establish by a preponderance of the evidence private interest that will be affected by the official action; (2)
that the “release” of the substances and the damages the risk of an erroneous deprivation of such interest through
resulting from the release were caused solely by an act or the procedures used and the probable value, if any, of
omission of a third party who was neither additional or substitute safeguards; and (3) the government's
(a) the present owners’ employee nor interest, including the function involved and the fiscal and
(b) someone who was in a contractual relationship administrative burdens that the additional or substitute
with the owners; procedural requirement would entail. See Mathews v.
and Eldridge, 424 U.S. 319, 335 (1976).
(2) the owners
(a) exercised due care with respect to the substances, The district court found that the risk of erroneous
in light of all relevant facts and circumstances, and deprivation was minimal because the Bohatys were given
(b) took precautions against the foreseeable actions both notice of the government’s intent to perfect the lien and
and omissions of third parties. a hearing before the EPA Regional Judicial Officer (“RJO”).
The Bohatys argue that due process was not satisfied because
The statutory definitions state, non-exclusively, that the the RJO is an EPA employee and because the lawsuit now
following contractual relationships satisfy (1)(b) above and before this court was filed before the RJO issued her decision.
thus create liability for owners: land contracts, deeds, or other The RJO was sufficiently institutionally isolated to satisfy due
instruments transferring title or possession, unless process, see 5 U.S.C. § 554(d); Withrow v. Larkin, 421 U.S.
35, 56 (1975), and the need to file this lawsuit before the
statute of limitations expired constituted an exigent
circumstance sufficient to excuse the timing of the
20 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 9
(e) The following removal actions are, as a general (i) the present owners acquired their interest in the real
rule, appropriate in the types of situations shown; property on which the facility is located after the
however, this list is not exhaustive and is not intended to “disposal” or “placement” of the substances, and
prevent the lead agency from taking any other actions (ii) the present owners
deemed necessary under CERCLA, CWA section 311, or (A) did not know, and had no reason to know, after
other appropriate federal or state enforcement or response “all appropriate inquiry,” of the substances, or
authorities, and the list does not create a duty on the lead (B) acquired their interests by inheritance or bequest.
agency to take action at any particular time:
.... Thus, present owners who acquired their interests by
(7) Removal of drums, barrels, tanks, or other bulk inheritance or bequest can avoid liability without having
containers that contain or may contain hazardous undertaken “all appropriate inquiry” with respect to the
substances or pollutants or contaminants—where it will “disposal” or “placement” by third parties of hazardous
reduce the likelihood of spillage; leakage; exposure to substances on the land before they acquired it. However, they
humans, animals, or food chain; or fire or explosion; must have exercised due care with respect to the substances,
in light of all relevant facts and circumstances, and taken
40 C.F.R. § 300.415 (emphasis added). precautions against the foreseeable actions and omissions of
third parties, while they have owned the land. Present owners
The question for decision, then, is whether removing the who acquired their interests by land contracts, deeds, or other
empty drums is “not inconsistent with” the provisions of 40 instruments transferring title or possession, and not by
C.F.R. § 300.415 set forth above. Absent evidence that there inheritance or bequest, must also have undertaken “all
were sufficient residual materials on the drums to constitute appropriate inquiry” when they acquired the property to avoid
a threat to the public health or welfare, removing the empty liability.
drums cannot be said to advance or promote the goals of the
NCP. However, even3 if strict logical inconsistency is not The 12/45 interest that Ethel Bohaty bought from the three
what the NCP means, Congress did not say that costs must other relatives was transferred by quit-claim deed, and was
advance or promote the NCP to be recoverable. The general not an inheritance or bequest. On first consideration, it
tenor of the NCP is permissive—the lead agency may take appears that for this interest to avoid liability, Ethel must
any appropriate action, including those on a list that is show that she undertook “all appropriate inquiry” when she
expressly not exhaustive and that includes removal of drums bought it. But see infra at 14-15. The remaining 33/45
that “may contain” hazardous substances. Arguably, drums interest can avoid liability if the Bohatys establish by a
that are known to be empty are not drums that “may contain” preponderance of the evidence that (1) the “disposal” or
hazardous substances. However, the generally permissive “placement” occurred before 1982, (2) the “release” of the
nature of the NCP, together with the apparent reasonableness substances and the damages resulting from the release were
of removing the empty drums, should be decisive. caused solely by an act or omission of a third party (i.e., that
they did not “cause or contribute to” the release, and (3) they
exercised due care with respect to the substances, in light of
3
If the NCP does mean strict logical inconsistency, then the EPA
all relevant facts and circumstances, and took precautions
could charge landowners for building an expensive sculpture on the land against the foreseeable actions and omissions of third parties
(assuming the sculpture were not itself a threat to health or welfare). since they have owned the land.
Presumably, this is absurd and compels a different interpretation of
“inconsistent.”
10 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 19
The Bohatys concede that they are the owners of the constitutes a “reasonable or natural” division into multiple
property, and thus that they are potentially responsible parties parts.
under § 9607(a)(1); they dispute that they are potentially
responsible parties under § 9607(a)(2), as the government We hold that it does not. There is no evidence in the record
argues, because they contend that no “disposal” of hazardous that the parcels were, at any relevant time, considered
substance has occurred while they owned the property. The separate for any purpose other than the land records. They
Bohatys also concede that a “release” of “hazardous were transferred on the same deed, and except for a small part
substances” has occurred on the property, that at least one of of one parcel they were in the same undeveloped state. The
the three parcels is a “facility,” and that the government merely formal division in the land records is not a “reasonable
incurred removal costs. They dispute the amount of the or natural” division under Brighton.
removal costs claimed by the government.
D. Which Removal Costs are Proper?
The issues on appeal are (1) whether the district court erred
when it decided that the Bohatys do not qualify for the The Bohatys argue that the removal action incurred
“innocent landowner” defense of §§ 9607(b)(3) and 9601(35) unnecessary costs, for which they should not be liable. In
set out above; (2) whether the district court erred when it particular, they claim that (1) the EPA should not have
decided that the two unaffected parcels are part of the removed the empty drums at all, because they posed no
“facility;” (3) whether the district court erred when it found environmental hazard; (2) the EPA should not have removed
that the costs of disposing of the empty barrels and the the underground storage tank, because it posed no
underground tank were properly part of the removal costs; and environmental hazard; (3) after the EPA consolidated the
(4) whether the Bohatys were deprived of due process by the contents of the 550 waste-containing drums into 300 drums
actions of the EPA and the district court. for disposal, it should not have disposed of the 250 additional
empty drums, because they posed no environmental hazard;
B. The Innocent Landowner Defense and (4) at a minimum, the 700 empty drums should have been
disposed of in a standard landfill rather than sent to a
The Bohatys argue first that they qualify for the “innocent hazardous-materials site (presumably, at greater cost).
landowner” defense of §§ 9607(b)(3) and 9601(35). The
district court held that CERCLA places liability on responsible parties for “all
costs of removal or remedial action incurred by the United
Defendants cannot assert such defenses because they States . . . not inconsistent with the national contingency
cannot prove that (1) the release or threat of release of plan.” 42 U.S.C. § 9607(a)(2)(A). The national contingency
hazardous substances and the resulting damages were plan (“NCP”) provides that:
caused solely by an act or omission of a third party; (2)
the third party’s act or omission did not occur in At any release . . . where the lead agency makes the
connection with a contractual relationship with the determination . . . that there is a threat to public health or
Defendants; (3) they exercised due care with respect to welfare of the United States or the environment, the lead
the hazardous substance; and (4) they took precautions agency may take any appropriate removal action to
against the third party’s foreseeable acts or omissions and abate, prevent, minimize, stabilize, mitigate, or eliminate
the foreseeable consequences resulting therefrom. the release or the threat of release.
40 C.F.R. § 300.415 (b)(1) (emphasis added).
18 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 11
law to interpret CERCLA’s lien provision is a tenuous Opinion, J.A. at 62. Each of the four holdings, if correct, is
proposition. dispositive standing alone.
The government states that this court has decided the issue, First, the district court held that hazardous substances were
relying on Kelley v. DuPont de Nemours & Co., 17 F.3d 836, “released” by the Bohatys. CERCLA defines “release” as
843 (6th Cir. 1994) for the proposition that a remedial follows: “The term ‘release’ means any spilling, leaking,
investigation and feasibility study constitutes a “removal pumping, pouring, emitting, emptying, discharging, injecting,
action.” Although Kelley does state that the term “removal escaping, leaching, dumping, or disposing into the
action” should be construed broadly, the statute-of-limitations environment (including the abandonment or discarding of
issue in that case does not illuminate the geographic issue in barrels, containers, and other closed receptacles containing
the case before us. Furthermore, the government’s claim that any hazardous substance or pollutant or contaminant).” 42
“the investigation in Kelley . . . examined ten contiguous sites, U.S.C. § 9601(22). Therefore, to prevail in their assertion of
only one of which actually contained hazardous waste,” Brief the “innocent landowner” defense, the Bohatys must prove
for the United States at 45, is misleading. There is no that all spilling, leaking, pumping, pouring, emitting,
indication that the ten “sites” were separate parcels—they emptying, discharging, injecting, escaping, leaching,
were merely ten locations in one large landfill that the EPA dumping, or disposing into the environment (including the
identified as possible locations of hazardous materials. The abandonment or discarding of barrels, containers, and other
Kelley panel simply did not consider the issue of the closed receptacles containing any hazardous substance or
geographical extent of a “removal.” pollutant or contaminant) was “caused solely by” the acts or
omissions of third parties who were neither employees nor
The distinctive feature of the case before this court is the persons in a contractual relationship with the Bohatys.
fact that the three parcels have separate identities,
notwithstanding that they were historically conveyed together. The district court held that the release of hazardous
The hard question is whether this should make any difference. substances was caused, in part, by the Bohatys’ “failure to
remove or stabilize the drums on their property.” The district
The words of the statute suggest that the bounds of a court evidently was not entirely clear about the elements of
facility should be defined at least in part by the bounds of and defenses to CERCLA liability. Having concluded that the
the contamination. . . . However, an area that cannot be release was not solely caused by a third party, which would in
reasonably or naturally divided into multiple parts or fact be fatal to the “third party” defense, the court then
functional units should be defined as a single ‘facility,’ confusingly stated that the Bohatys “can still attempt to assert
even if it contains parts that are non-contaminated. the innocent purchaser defense by demonstrating that a third
party’s ‘act or omission [causing the release of hazardous
United States v. Township of Brighton, 153 F.3d 307, 313 wastes at the Site] occur[red] in connection with a contractual
(6th Cir. 1998) (citing Clear Lake Properties v. Rockwell Int’l relationship, existing directly or indirectly with’ them.” J.A.2
Corp., 959 F. Supp. 763, 767-68 (S.D. Tex. 1997)). In at 63 (brackets in original) (citing 42 U.S.C. § 9607(b)(3)).
Brighton, we held that where “it appear[ed] that the entire
property was operated together as a dump,” the whole parcel
was a “facility” even though only one corner was 2
contaminated. Ibid. To apply the teaching of Brighton, we Section 9601(35)(A) exempts certain, apparently contractual,
relationships from the § 9607(b)(3) rule that present owners are liable if
must decide whether the fact that the Bohaty property is the release was caused by third parties with whom they have contractual
composed of three cartographically-denominated parcels ties (or, whom they employ).
12 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 17
The court decided that the answer to this question depends (B) The time that the person referred to in paragraph
upon whether the “disposal” preceded the Bohatys’ (1) is provided (by certified or registered mail) written
acquisition of the property and concluded that “disposal” was notice of potential liability.
ongoing. For its definition of “disposal,” CERCLA refers to Such lien shall continue until the liability for the costs
the Solid Waste Disposal Act, which states that “[t]he term (or a judgment against the person arising out of such
‘disposal’ means the discharge, deposit, injection, dumping, liability) is satisfied or becomes unenforceable through
spilling, leaking, or placing of any solid waste or hazardous operation of the statute of limitations provided in section
waste into or on any land or water.” 42 U.S.C. § 6903(3). 9613 of this title.
The distinction between “disposal” and “release” is 42 U.S.C. § 9607(l)(1).
important to our resolution of the case before us. Although
early CERCLA decisions interpreted “disposal” to include The government argues that the three parcels were all
passive movement of substances (i.e., with no human “subject to or affected by” the removal. EPA investigators
activity), two circuits have recently limited “disposal” to observed Parcels 2 and 3 both visually and with a
spills occurring by human intervention. See United States v. magnetometer to locate any drums that might have been
CDMG Realty Co., 96 F.3d 706 (3rd Cir. 1996); ABB Indus. deposited there. The government presented evidence that the
Sys., Inc. v. Prime Tech, Inc., 120 F.3d 351, 358 (2d Cir. pond, upon which the investigators expended considerable
1997) (adopting the reasoning of CDMG Realty). This energy, extends beyond Parcel 1 to Parcel 3. Are these
interpretation of the statute is the better view for several
reasons. See Michael S. Caplan, “Escaping CERCLA such actions as may be necessary to monitor, assess, and
Liability: The Interim Owner Passive Migration Defense evaluate the release or threat of release of hazardous
Gains Circuit Recognition,” 28 ENVTL. L. REP. 10121 (1998). substances, the disposal of removed material, or . . . such
First, because “disposal” is defined primarily in terms of other actions as may be necessary to prevent, minimize,
active words such as injection, deposit, and placing, the or mitigate damage to the public health or welfare or to
potentially passive words “spilling” and “leaking” should be the environment, which may otherwise result from a
interpreted actively; second, “release” must be broader than release or threat of release?
“disposal,” because disposal is included within release, see 42
U.S.C. § 9601(22); and third, it makes sense of the statutory They may be, but that does not appear self-evident.
scheme as well as the words themselves to have “disposal”
stand for activity that precedes the entry of a substance into The record indicates that interests in the three parcels have
the environment and “release” stand for the actual entry of been transferred together by the same instruments, rather than
substances into the environment. On this more recent view, by separate instruments for each parcel, at least since 1982.
the Bohatys acquired the property after the “disposal.” The The district court looked to asset-forfeiture cases, and found
question is whether “release” continued after their acquisition. support for the proposition that a “property” is “defined by the
recorded instruments and documents that created the
In the absence of any evidence that there was human defendant’s interest in the property.” See United States v.
activity involved in whatever movement of hazardous Smith, 966 F.2d 1045 (6th Cir. 1992) (citing United States v.
substances occurred on the property since the Bohatys have Santoro, 866 F.2d 1538, 1543 (4th Cir 1989) and United
owned it, we hold that the Bohatys have not “disposed” of States v. Reynolds, 856 F.2d 675, 677 (4th Cir 1988)). As the
hazardous substances on the property. We also hold that the district court acknowledged, looking to criminal forfeiture
16 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 13
C. What Constitutes the “Facility”? Bohatys have raised genuine issues of material fact as to the
three other crucial issues: whether they (1) “released”
The parties agree that no release nor threat of release hazardous substances on the land, (2) “exercised due care
occurred on Parcels 2 and 3. Therefore, the Bohatys argue, with respect to the hazardous substance concerned, taking into
even if they are liable, a lien is appropriate only on Parcel 1. consideration the characteristics of such hazardous substance,
in light of all relevant facts and circumstances,” and (3) “took
(9) The term “facility” means . . . (B) any site or area precautions against foreseeable acts or omissions of [third
where a hazardous substance has been deposited, stored, parties] and the consequences that could foreseeably result
disposed of, or placed, or otherwise come to be located. from such acts or omissions.” These holdings resolve the
.... appeal on the 33/45 interest obtained by inheritance by the
(23) The terms “remove” or “removal” means [sic] the present Bohaty owners. We give our reasoning on each of the
cleanup or removal of released hazardous substances three in turn.
from the environment, such actions as may be necessary
taken in the event of the threat of release of hazardous The only evidence presented by the government that the
substances into the environment, such actions as may be Bohatys “released” hazardous substances were several
necessary to monitor, assess, and evaluate the release or photographs showing what might be hazardous substances on
threat of release of hazardous substances, the disposal of the ground near rusted drums and the statements of inspectors
removed material, or the taking of such other actions as to that effect. No evidence was presented, for example, that
may be necessary to prevent, minimize, or mitigate at one time after the Bohatys acquired the land the piles near
damage to the public health or welfare or to the certain drums were one size and, later, that they were larger.
environment, which may otherwise result from a release The government appears to be relying on the inference that
or threat of release. because there were hazardous substances outside the drums,
and because some of the drums were not empty, the leaking
42 U.S.C. § 9601. must have been ongoing. Perhaps, with appropriate factual
development, the government will be able to justify that
All costs and damages for which a person is liable to inference at trial. The government has not, however,
the United States under subsection (a) of this section . . . advanced sufficient evidentiary support at this time to show
shall constitute a lien in favor of the United States upon the absence of a genuine issue of material fact.
all real property and rights to such property which—
(A) belong to such person; and The fact that the drums were present on the property and
(B) are subject to or affected by a removal or remedial that the Bohatys knew about them, at least after the first
action. OEPA visit in 1987, calls into question whether the Bohatys
.... “exercised due care with respect to the hazardous substance[s]
The lien imposed by this subsection shall arise at the concerned, taking into consideration the characteristics of
later of the following: such hazardous substance[s], in light of all relevant facts and
(A) The time costs are first incurred by the United circumstances.” However, the Bohatys presented evidence
States with respect to a response action under this that after both the 1987 and the 1989 inspections they asked
chapter. OEPA to advise them if anything needed to be done, that the
tests performed in 1987 by OEPA were negative, and that
OEPA never told them that action was necessary. The
14 United States v. 150 Acres of Land No. 98-3160 No. 98-3160 United States v. 150 Acres of Land 15
Bohatys have raised a genuine issue of material fact as to commercial or customary practice in an effort to minimize
whether they exercised the required degree of care. liability.” The definition also emphasizes the particularity of
the inquiry by noting that “the court shall take into account
The government has shown that the property was accessible any specialized knowledge or experience on the part of the
to third parties, which may indicate that the Bohatys did not defendant, the relationship of the purchase price to the value
take “precautions against foreseeable acts or omissions of of the property if uncontaminated, commonly known or
[third parties] and the consequences that could foreseeably reasonably ascertainable information about the property, the
result from such acts or omissions.” However, there is no obviousness of the presence or likely presence of
evidence in the record that any third parties ever contamination at the property, and the ability to detect such
compromised the integrity of the drums or otherwise caused contamination by appropriate inspection.”
the release of their contents. Perhaps the precautions taken by
the Bohatys were adequate under the circumstances. Again, These paragraphs and definitions obviously contemplate
the government has not shown the absence of a genuine issue primarily a willful acquisition or purchase of the property for
of material fact. a particular commercial or personal purpose. They also,
though not explicitly, seem to contemplate the acquisition of
Therefore, as to the 33/45 inherited interest, the Bohatys all of the interest in a “facility” at one time. This case,
have shown a genuine issue of material fact as to each however, is of quite a different sort. Ethel and the other
element of the CERCLA innocent landowner defense and are Bohaty defendants had inherited undivided interests
entitled to proceed to trial. constituting a large majority of the ownership of the parcel.
Three other heirs had inherited very small portions, less than
Finally, with respect to the 12/45 interest sold to Ethel by two years before the other fractional interests were
other Bohaty heirs, we hold that Ethel has raised a genuine bequeathed to Ethel. A year later, while the estate of Ethel’s
issue of material fact as to whether she “undert[ook], at the husband was still in probate, the three other relatives sold
time of acquisition, all appropriate inquiry into the previous their fractional interest to Ethel. Under these circumstances,
ownership and uses of the property consistent with good where one part-owner by inheritance acquires an interest from
commercial or customary practice in an effort to minimize another part-owner by inheritance, apparently merely to
liability” with respect to the interest she purchased from her consolidate the inherited ownership interest, the level of
relatives. “appropriate inquiry” is a very fact-specific question. We see
no evidence in the record of what is “customary practice” in
There is no evidence that Ethel conducted a particular connection with such family transactions. There is also no
inquiry when she bought the interests. evidence of the specific purchase price and the “value of the
property if uncontaminated” or other factors mentioned in the
However, the particular inquiry that is necessary under the definition. Under these circumstance we hold simply that, at
statutory definition is clearly dependent on the totality of the this time, we cannot state as a matter of law that Ethel’s
circumstances. In particular, the requirement is that “the actions were not “appropriate inquiry” under the
defendant . . . has no reason to know that any hazardous circumstances at the time of the sale of the other fractional
substance . . . was disposed of . . . at the facility.” 42 U.S.C. interests. On remand, the burden will rest on Ethel, assuming
§ 9601(35)(A)(i). Subsection (35)(B) amplifies this definition all the other requisites of the defense with respect to her
stating that “the defendant must have undertaken, at the time inherited interests are met, to also show that she met the
of acquisition, all appropriate inquiry into the previous requirement of “appropriate inquiry.”
ownership and uses of the property consistent with good