## Facts

- A 70-acre wetlands property in Carson, California was used for petroleum operations beginning around 1945 under Unocal’s leasehold.
- Petroleum byproducts (tar-like and slag materials) were deposited on parts of the site, including a drainage swale and wetlands area, decades before the property became a mobile-home park.
- The property later was owned and operated as a mobile-home park by a partnership; Carson Harbor Village, Ltd. purchased it in 1983 and continued operating the park.
- In 1993, Carson Harbor discovered tarry/slag materials in the drainage/wetlands area and incurred response costs to remove and remediate contamination.
- Carson Harbor sought to recover cleanup costs under CERCLA and state-law theories from prior owners/operators and governmental entities.
- As to certain former owners (the partnership parties), the alleged “disposal” during their ownership was not active dumping, but the continued movement or leaching of pre-existing contamination while it remained in place.

## Issues

1. Whether “disposal” under CERCLA includes purely passive migration or leaching of hazardous substances during a former owner’s tenure, absent contemporaneous active human conduct.
2. Whether a county storm drain that conveyed contaminated stormwater constituted a separate CERCLA “facility” supporting liability on the theories asserted.
3. Whether the current owner qualified for CERCLA’s “innocent landowner” defense based on lack of knowledge and “all appropriate inquiry” at purchase.

## Decision

- The en banc court held that “disposal” under CERCLA does not include passive migration of contamination.
- The court affirmed summary judgment that the partnership parties were not liable as owners “at the time of disposal” where no active disposal occurred during their ownership.
- The court rejected the storm-drain-based “facility” theory on the record presented, limiting governmental-entity liability tied to the drain’s operation as a conduit.
- The court held the plaintiff failed to satisfy the statutory requirements for the “innocent landowner” defense.
- The court affirmed in large part the district court’s CERCLA rulings addressing the passive-migration liability theory, with other aspects disposed of as set out in the en banc disposition.

## Legal Principles

- CERCLA “disposal” (incorporating RCRA’s definition) requires conduct connoting affirmative human agency; passive migration or gradual spread of previously deposited contamination, without contemporaneous human action, is not “disposal.”
- A prior owner is not liable under CERCLA § 9607(a)(2) solely because contamination already present continues to migrate during that owner’s tenure if no disposal occurred during that period.
- A storm drain that merely conveys contaminated water, without evidence it is a site of disposal attributable to the drain’s operators on the asserted theories, does not automatically constitute a separate CERCLA “facility” for imposing PRP liability.
- The “innocent landowner” defense requires the purchaser to prove lack of actual or constructive knowledge and completion of “all appropriate inquiry” consistent with good commercial or customary practice; failure to meet these elements defeats the defense.

## Conclusion

The Ninth Circuit, sitting en banc, narrowed CERCLA owner liability by holding that passive migration is not “disposal,” limited liability theories premised on a storm drain as a separate facility on the facts presented, and denied the current owner the innocent landowner defense for failure to satisfy statutory due-diligence and knowledge requirements.


Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir. 2001) (en banc)