By Lawrence Schnapf, Principal, Schnapf LLC
The recent decision in Sisters of Notre Dame De Namur v. Mrs. Owen J. Garnett-Murray, 2012 U.S. Dist. LEXIS 78747 (N.D. Cal. 6/6/12), is the latest example of how vapor intrusion has become a game changer for toxic tort and RCRA litigation. Vapor intrusion was the only potential exposure pathway since groundwater was not used for drinking water purposes. Without vapor intrusion, the plaintiffs would likely not have prevailed on their RCRA 7002 and nuisance actions. Moreover, the failure of the defendant landowners to take action following receipt of phase 1 reports became a key factual underpinning in the court's decision that the defendants' breached a duty of care.
In this case, the plaintiffs acquired a plot of land in October 2007 through a charitable bequest that they hoped to sell to a developer. In the course of a proposed transaction, they learned that their property had been impacted with PCE vapors that had migrated from the adjoining Fremont Corners shopping center where several dry cleaners had operated since 1960. The Sisters could not close on the proposed sale because building permits could not be obtained until the PCE contamination was addressed.
In July 2008, plaintiffs sent a letter to the owner of the shopping center requesting that they remediate the contamination. In March 2009, the shopping center owner hired an environmental consultant who conducted a comprehensive site assessment. In May 2010, the consultant submitted a proposed remediation plan to the Santa Clara County Department of Environmental Health ("DEH"). After the remedial plan was approved but before it was implemented, the plaintiffs filed their lawsuit seeking injunctive relief under RCRA 7002 as well as damages for nuisance and trespass. The defendants commenced remediation in October 2011.
Plaintiffs move for partial summary judgment on the issue of liability for all three of their claims. To establish liability under RCRA 7002, a plaintiff has to show that a defendant "contributed to" the past or current handling, storage, treatment or disposal of solid or hazardous waste" that "may present an imminent and substantial endangerment".
The defendants first argued that the plaintiffs had no standing to bring their lawsuit or that their claims were moot because of the remedial actions, and because the plaintiff's property was vacant so there was no potential population at risk. However, the court rejected this argument because RCRA 7002 permits a plaintiff to bring a citizen suit to enjoin a threat of endangerment.
The defendants also argued that the primary jurisdiction doctrine should preclude the court from asserting jurisdiction over the plaintiff's claims because remedial actions were already underway. Like many other courts, though, this court declined to apply to doctrine to common law claims. However, the court then went further than many other courts and suggested that the doctrine did not bar RCRA 7002 actions where the state had not commenced or prosecuted an action under RCRA 7002, and had not incurred costs to implement a removal action or RI/FS. (It appears that the court or perhaps the briefing may have conflated the RCRA jurisdictional argument with the primary jurisdiction doctrine). This ruling appears to conflict with the reasoning of another judge in the same district in West Coast Home Builders v. Aventis Cropscience, 2009 U.S. Dist. LEXIS 74460 (N.D.CA 8/21/09), where the court found there was no imminent and substantial endangerment posed by vapors from a landfill because the residential development had not yet been constructed.
Turning to the "imminent and substantial endangerment" prong, the court also rejected the defendant's assertion that the contamination did not pose an imminent and substantial endangerment because no one lived at the plaintiff's property. There was no evidence that contaminated groundwater had yet to migrate to the plaintiff's property so the only potential endangerment was the presence of vapors.
The court noted that PCE soil vapor levels under the dry cleaner were up to 70 times the screening levels for commercial properties and exceeded the screening levels for residential properties by a factor of 15 at the plaintiff's property. Moreover, the court went on, the Plaintiffs did not have to prove that actual harm exists. It was enough, in the court's opinion, that the levels of PCE soil vapor on both properties far exceeded California's established limits for non-hazardous exposure to humans. Indeed, the court concluded, the "incredibly high PCE levels" under the shopping center posed an actual risk to the employees and customers who work at or visited the shopping center.
Defendant Mrs. Garnett-Murray had inherited her interest in the shopping center from her husband. She held 30% of the shopping center property individually and was the sole shareholder of the corporation that held the remaining 70% ownership. She argued that she could not be liable for " contributing to" the imminent and substantial endangerment because she had not been actively involved with the property and had no knowledge of any when the PCE was discharged. However, the court said it was undisputed that Murray and Fremont Corners, Inc. learned of the PCE contamination in 2006 and 2007 as a result of due diligence performed in connection with a proposed transaction. The court noted that the environmental reports were addressed to Mrs. And Mr. Murray, and warned of potential groundwater and that the PCE vapor "in some form or fashion," may have caused or may still be causing "further damage to the land and surrounding environment. The court said the defendants admitted that they took no steps to remediate the contamination until 2009. However, the court said it was not prepared to hold as a matter of law that plaintiff's evidence establishes liability through passive inaction or studied indifference, although it might well persuade a jury. Accordingly, the court found there was a genuine issue of material fact exists as to whether Garnet Murray and Fremont Corners, Inc. "contributed to" the contamination of Fremont Corners and the plaintiff's property through passive inaction.
On the nuisance claim, though, the court concluded that repeated warnings of the risk of such contamination put the defendants on notice that the PCE contamination could spread and cause harm beyond the bounds of their property. This court held that the defendants' actual knowledge of a PCE plume under their own property coupled with their control over the premises and the ability to abate the dangerous condition created a duty of ordinary care, and the failure to take any steps toward remediation constituted a breach of that duty. Had defendants acted promptly to begin remediation of the contamination on their own property, the court continued, the contamination of plaintiff's adjoining property would have been lessened or prevented. As a result, the court found that defendants' breach proximately caused plaintiff's injury and granted plaintiff's motion for summary judgment on nuisance claim.
Lawrence P. Schnapf is an environmental attorney based in New York City and New Jersey with over 25 years of national environmental transactional experience and is the principal of Schnapf LLC. With this background and his geology training, Larry is uniquely qualified to handle the legal and technical issues commonly encountered with environmental issues. Larry is also a contributing author for several chapters of "Brownfields Law and Practice: The Cleanup and Redevelopment of Contaminated Properties" published by Matthew Bender and the Matthew Bender "Environmental Law Practice Guide".
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