## Facts

- Getty Oil transported crude oil by pipeline and used pumping stations with heated storage tanks.
- In storage tanks, solids and water settled to the bottom, creating “basic sediment and water” or “crude oil tank bottoms.”
- Getty routinely drained tank bottoms and disposed of them in nearby sumps.
- A pumping station near Tracy, California disposed of tank bottoms about weekly into a sump area on nearby property known as the “Gravel Pit.”
- Getty closed the Tracy pumping station by 1968.
- In 1974, Don Cose purchased the 40-acre Gravel Pit parcel from Getty for $50,000; the Coses alleged a topsoil layer concealed the dumped materials so a reasonable inspection would not reveal them.
- In 1987, during planned residential development, the Coses discovered subsurface tar-like material; testing showed high levels of chrysene, a carcinogenic compound listed as a hazardous substance.
- The Coses incurred investigation and cleanup expenses and sought to recover response costs under CERCLA from Getty’s alleged successors and related entities.

## Issues

1. Whether crude oil tank bottoms discarded into a disposal pit qualify as “petroleum” or a “fraction” of crude oil within CERCLA’s petroleum exclusion, thereby removing them from CERCLA’s definition of “hazardous substance.”
2. If the petroleum exclusion does not apply, whether the presence of a listed hazardous constituent (chrysene) permits the Coses to proceed on CERCLA’s “release of a hazardous substance” element for cost recovery.

## Decision

- The Ninth Circuit reversed the district court’s summary judgment for defendants.
- The court held that crude oil tank bottoms dumped as waste in the Gravel Pit did not fall within CERCLA’s petroleum exclusion.
- The court concluded the material could constitute a CERCLA “hazardous substance” when it contains specifically listed hazardous constituents such as chrysene.
- The case was remanded for further proceedings.

## Legal Principles

- CERCLA’s petroleum exclusion is construed narrowly and does not automatically extend to petroleum-related residues that have been discarded as waste.
- “Fractions” of crude oil protected by the petroleum exclusion refer to useful petroleum products or refining outputs, not waste mixtures of separated water and solids drained from storage tanks and dumped in disposal sites.
- The petroleum exclusion does not bar CERCLA coverage where the material at issue contains hazardous substances specifically listed under CERCLA (or incorporated listings), such as chrysene.
- Summary judgment is improper where the record supports treating the disposed material as waste outside the petroleum exclusion, leaving CERCLA liability elements to be litigated on remand.

## Conclusion

The Ninth Circuit held that crude oil tank bottoms discarded into a disposal pit were not shielded by CERCLA’s petroleum exclusion and, because they contained a listed hazardous substance, could support a CERCLA cost-recovery claim for incurred response costs.


Cose v. Getty Oil Co., 4 F.3d 700 (9th Cir. 1993)