## Facts

- A wood-treatment facility operated on the property from 1946 to 1972, allegedly leaving substantial highly toxic waste.
- In 1973, subsequent owners filled and graded creosote pools and began residential development of the Tanglewood East subdivision in Montgomery County, Texas.
- By 1980, homeowners complained to state authorities about toxic conditions and development ceased.
- In 1983, the EPA placed the site on the National Priorities List, and remediation was expected to cost millions of dollars and require significant measures, including demolition of several homes.
- Homeowners and lot owners sued developers, builders, real estate entities, and a financing institution that funded purchases and held security interests, seeking damages, response/cleanup costs, and injunctive relief under CERCLA and RCRA.

## Issues

1. Whether the complaint alleged a non-frivolous federal claim and stated a plausible cause of action under CERCLA sufficient to defeat dismissal under Rules 12(b)(1) and 12(b)(6), including as to a lending institution.
2. Whether the complaint stated a claim for relief under RCRA’s citizen-suit provisions based on alleged contribution to handling or disposal of hazardous waste presenting an imminent and substantial endangerment.

## Decision

- The Fifth Circuit affirmed the interlocutory order denying defendants’ motion to dismiss.
- The court held the complaint adequately alleged claims under CERCLA and RCRA to support federal-question jurisdiction and to state claims for relief at the pleading stage.
- Whether particular defendants qualified as owners, operators, arrangers, or contributors under the statutes was treated as a factual matter not resolvable on a motion to dismiss.
- Allegations concerning response costs, national contingency plan consistency, and the relationship between private claims and EPA remediation were deemed fact-intensive and premature for Rule 12(b)(6) resolution.

## Legal Principles

- When a complaint challenges both jurisdiction and the existence of a federal cause of action, dismissal is improper if the pleadings, liberally construed, assert a non-frivolous claim arising under federal law.
- CERCLA’s liability provisions are broad and may reach parties beyond the hazardous-waste industry, including entities alleged to be present owners/operators or otherwise within statutory categories.
- A plaintiff need not prove, at the pleading stage, the ultimate factual basis for CERCLA status (e.g., “owner,” “operator,” or “arranger”); plausible allegations are sufficient to proceed to discovery.
- Allegations seeking CERCLA response costs are not dismissed at the outset merely because disputes exist about consistency with the national contingency plan or coordination with governmental cleanup activities.
- RCRA authorizes citizen suits against persons who contributed or are contributing to the handling, storage, treatment, transportation, or disposal of hazardous waste that may present an imminent and substantial endangerment; plausible allegations of such contribution and endangerment state a claim.

## Conclusion

The Fifth Circuit held that homeowners’ pleadings plausibly brought developers and a lender within CERCLA and RCRA’s remedial schemes, so the federal environmental claims could not be dismissed under Rules 12(b)(1) or 12(b)(6) before factual development.


Tanglewood E. Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568 (5th Cir. 1988)