## Facts

- From the 1920s through about 1990, Elementis Pigments, Inc. and Pfizer, Inc. (collectively, EPI), along with other businesses, operated on roughly 15 acres of property in and around Emeryville, California.
- Those operations contaminated soil and groundwater with heavy metals, volatile organic compounds, and other hazardous substances.
- In 1995, the City of Emeryville began a redevelopment effort and started negotiating with property owners to acquire parcels within the contaminated area.
- Before and during negotiations, the City investigated environmental conditions at the site.
- By 1999, the City had purchased two parcels from businesses other than EPI and began response actions tied to investigation and cleanup.
- The City also attempted to negotiate a purchase of EPI’s parcel; when negotiations failed, a state court authorized the City (in January 1999) to take EPI’s property by eminent domain.
- In August 1999, the City sued EPI and others under CERCLA and state law to recover response costs associated with cleaning up the property.
- The City settled with other defendants. EPI filed counterclaims seeking CERCLA contribution from the City, contending the City was itself liable as an owner because its earlier parcel acquisitions were voluntary purchases rather than acquisitions “by eminent domain” or another type of involuntary transfer.
- The parties filed cross-motions for summary judgment directed to EPI’s contribution counterclaims and the City’s claimed statutory protection as a governmental entity that acquired property involuntarily.

## Issues

1. Whether the City’s acquisitions of two parcels by negotiated purchase, made in the context of redevelopment and the City’s condemnation authority, could be treated as involuntary governmental acquisitions for purposes of CERCLA’s protections for governmental entities that acquire property by eminent domain or similarly involuntary means.
2. Whether, if those acquisitions qualified as involuntary, the City could avoid CERCLA owner liability such that EPI’s CERCLA contribution counterclaims failed as a matter of law.
3. Whether EPI was entitled to summary judgment on its theory that the City’s purchases were voluntary transactions that made the City a liable “owner” for contribution purposes.

## Decision

- The court denied EPI’s motion for summary judgment on its CERCLA contribution counterclaims.
- The court granted the City’s motion for summary judgment on EPI’s contribution counterclaims.
- The court treated the City’s negotiated purchases—made under a realistic possibility of condemnation—as fitting within CERCLA’s protection for governmental acquisitions that are not truly voluntary market purchases.
- Because the City was not a liable party on EPI’s owner-liability theory, EPI could not pursue CERCLA contribution against the City based on the City’s acquisition of the parcels.

## Legal Principles

- CERCLA does not treat a governmental entity as an “owner or operator” for liability purposes when it acquires property involuntarily, including through eminent domain (and similar non-voluntary transfers recognized by statute).
- A negotiated conveyance to a public entity may be treated as functionally involuntary when it occurs under a concrete, imminent condemnation backdrop, rather than as an arm’s-length purchase in an ordinary market setting.
- A CERCLA contribution claim under § 113(f) depends on the target being a liable party under § 107(a); where a statutory protection removes owner liability for the governmental acquirer, contribution claims premised on that owner status cannot proceed.
- On summary judgment, the court may dispose of contribution counterclaims where the record does not support a triable issue that the governmental purchaser is a liable owner under CERCLA.

## Conclusion

The court held that Emeryville’s parcel acquisitions, though negotiated, occurred under a realistic condemnation context and could be treated as involuntary governmental acquisitions under CERCLA, defeating Elementis’s attempt to recast the City as a liable owner and eliminating Elementis’s CERCLA contribution counterclaims on summary judgment.


Emeryville v. Elementis Pigments, Inc., 2001 WL 964230, 52 ERC 1648 (2001)