## Facts

- Hearthside Residential Corporation purchased the Fieldstone Property, an undeveloped wetlands tract in Huntington Beach, California, knowing it was contaminated with polychlorinated biphenyls (PCBs).
- The Fieldstone Property was adjacent to nearby residential parcels (the Residential Site) that Hearthside never owned or occupied.
- In 2002, Hearthside entered a consent order with California’s Department of Toxic Substances Control (DTSC) to remediate PCB contamination on the Fieldstone Property.
- DTSC determined the Residential Site was also contaminated and alleged PCBs migrated from the Fieldstone Property to the Residential Site.
- Hearthside disputed responsibility for the Residential Site and limited its work to the Fieldstone Property.
- DTSC contracted for cleanup of the Residential Site and incurred response costs between July 2002 and October 2003.
- DTSC certified completion of cleanup at the Fieldstone Property on December 1, 2005; later that month, Hearthside sold the Fieldstone Property to the California State Lands Commission.
- DTSC sued Hearthside under CERCLA § 107(a) to recover the Residential Site cleanup costs, asserting Hearthside was liable as the “current owner” of the Fieldstone Property when the costs were incurred.

## Issues

1. For CERCLA § 107(a)(1) cost-recovery liability, is “owner and operator” status determined at the time government cleanup costs are incurred or at the time the cost-recovery complaint is filed?

## Decision

- The Ninth Circuit affirmed judgment for DTSC.
- The court held that for CERCLA § 107(a)(1), the “current owner” is the owner of the facility at the time cleanup costs are incurred.
- Because Hearthside owned the Fieldstone Property when DTSC incurred the Residential Site cleanup costs, Hearthside was liable under § 107(a)(1) despite selling the property before DTSC filed suit.

## Legal Principles

- CERCLA § 107(a)(1) imposes liability for government response costs on the owner and operator of a facility, and “current owner” status is measured when the response costs are incurred.
- Interpreting “current owner” by reference to the time costs are incurred advances CERCLA’s remedial aims of prompt cleanup and allocating costs to responsible parties.
- Measuring ownership at the time of filing would permit avoidance of liability through post-contamination or mid-remediation transfers of title.
- Administrative concerns about correlating ownership and cost-incurrence dates do not override the statutory purpose where cleanup records and ownership documentation typically allow workable proof.

## Conclusion

The Ninth Circuit ruled that CERCLA § 107(a)(1) “current owner” liability turns on who owned the facility when the government incurred cleanup costs, making a former owner liable for those costs even if it sold the property before the cost-recovery action was filed.


Cal. Dep’t of Toxic Substances Control v. Hearthside Residential Corp., 613 F.3d 910 (9th Cir. 2010)