California City Succeeds in Establishing Joint and Several Liability Under CERCLA – Court Rejects Defendants’ Divisibility Defense
By Bret Stone
The City of West Sacramento filed a lawsuit under RCRA, CERCLA, the Gatto Act, and several other state law causes of action to address toxic levels of soil and groundwater contamination resulting from the release of hazardous substances at a property once occupied by a metal plating facility. The Court found the defendants liable after the City filed a motion for summary judgment. It also held, however, that the defendants were entitled to an evidentiary hearing on their divisibility defense to joint and several liability on the CERCLA claim.
Following three days of testimony and evidence, the Court found that the former operators of a chrome plating facility did not meet their burden to prove their divisibility defense under CERCLA. Accordingly, the Court held each of the defendants jointly and severally liable for the entirety of the harm (i.e., each defendant is responsible for 100% of the harm).
A divisibility defense under CERCLA is not a defense to liability. Rather, it is a defense to the scope of liability, specifically, to joint and several liability, under CERCLA. If proven, the divisibility defense allows responsible parties to avoid joint and several liability and instead allows a court to apportion liability among them. Importantly, apportionment of liability pursuant to the divisibility doctrine is distinct from allocation of liability based on equitable factors that would be considered in a CERCLA §113(f) contribution action.
To prevail on the divisibility defense, the defendant asserting the defense must prove: (1) that the environmental harm is theoretically capable of apportionment, and (2) that there is a reasonable basis on which to apportion liability. If the proponent of the defense carries its burden, then the court will apportion liability among the responsible parties so that each is subject to liability only for the portion of the total harm that he has himself caused. Otherwise, the responsible parties will be held jointly and severally liable so that each is subject to liability for the entire harm.
The Court found that the defendants did not establish that the entirety of the contamination is theoretically capable of apportionment because the contamination still has not been fully delineated. Without full delineation and a remedial plan that could be approved by the regulatory agency, the defendants’ suggested percentages for their liability cannot be accurate if the whole from which it is measured is not known. The entire harm must be evaluated combined with all other pollution; not just the harm caused by defendants alone. Absent an evaluation of the contamination as a whole, including additional impacts of mixing pollutants, the Court could not conclude the harm was divisible.
The Court also rejected the defendants’ arguments that the amount of contamination attributable to them could be apportioned chemically, geographically, and volumetrically. After a fact-intensive analysis, the Court concluded that defendants did not show a reasonable basis to apportion responsibility chemically because the chemical contaminants released by others were commingled and collocated with the chemicals released by the defendants. It also found excavation of contaminated soils would be “one big blob” making it impossible to carve up the site geographically into separate and distinct portions that reflect the defendants’ contribution to a single harm. Finally, the Court found that the evidence did not support the many assumptions made by the defendants’ expert to support a theory of volumetric apportionment.
To read the entire 28-page opinion, click here.