## Facts

- A metal-recycling scrapyard near Pocatello, Idaho included an area known as the “gravel pit.”
- Between about 1970 and 1973, roughly 600 PCB-containing electrical capacitors were dumped in the gravel pit and later leaked PCB-laden liquid into soil.
- McCarty’s, Inc. operated the scrapyard; after the founders’ deaths, stock passed to family members, and the business later transferred operating assets to Pacific Hide & Fur Depot, Inc.
- By 1982, McCarty’s, Inc. transferred remaining assets (including the gravel pit) to shareholders and ceased corporate ownership; individual family members acquired interests through inheritance and intra-family conveyances.
- In March 1983, federal agents discovered the capacitors; the EPA conducted removal and excavation of capacitors and contaminated soil.
- The United States sued under CERCLA for response costs and injunctive relief, naming corporate entities and individual McCarty family members.
- The individual defendants moved for partial summary judgment and dismissal; the United States cross-moved for partial summary judgment.

## Issues

1. Whether certain individual defendants who acquired interests after disposal were liable as current “owners” under CERCLA § 107(a)(1), or were protected by the innocent landowner defense under CERCLA §§ 101(35) and 107(b)(3).
2. Whether any individual defendants could be liable under CERCLA § 107(a)(2) as owners or operators at the time of disposal based on control over facility operations during the dumping period.
3. Whether the complaint sufficiently stated CERCLA claims against the individual defendants to survive a motion to dismiss.

## Decision

- Granted partial summary judgment for certain individual defendants as to CERCLA current-owner liability, holding they qualified as innocent landowners because they acquired their interests after disposal and lacked knowledge or reason to know of contamination when they acquired.
- Denied summary judgment to the extent the United States pursued liability for ownership or operation at the time of disposal, finding genuine disputes of material fact about operational control during the 1970–73 dumping period.
- Granted in part and denied in part the motion to dismiss consistent with the above: current-owner claims were curtailed for defendants meeting the innocent-landowner criteria, while disposal-time owner/operator theories remained.

## Legal Principles

- CERCLA generally imposes strict liability on facility owners and operators for releases of hazardous substances, subject to limited statutory defenses.
- The innocent landowner defense requires proof that the defendant acquired the facility after disposal and, at acquisition, did not know and had no reason to know of the disposal, considering “all appropriate inquiries” consistent with good commercial or customary practice.
- “All appropriate inquiries” is context-dependent; a court may consider the nature of the acquisition, including whether it was a familial or testamentary transfer rather than an arms-length commercial purchase.
- Absence of formal environmental investigation is not automatically fatal to the innocent landowner defense where circumstances did not reasonably suggest contamination.
- Liability as an owner/operator at the time of disposal is distinct from current-owner liability and is fact-intensive, turning on evidence of control over facility operations during disposal.

## Conclusion

The court held that several McCarty family members who acquired the contaminated property through inheritance or family transfers after the PCB dumping were not liable as current owners because they satisfied CERCLA’s innocent landowner defense, but it allowed the government to proceed on claims that certain individuals may have been owners or operators at the time of disposal based on unresolved factual questions about operational control.


United States v. Pac. Hide & Fur Depot, Inc., 716 F. Supp. 1341 (D. Idaho 1989)