AMENDED* ORDER DENYING MOTION FOR SUMMARY JUDGMENT
This motion for summary judgment requires the Court to decide whether: (1) a genuine issue of material fact exists as to whether defendant is an "operator" liable under the Federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and the California Hazardous Substance Account Act ("the California HSAA"); (2) plaintiff's claim under CERCLA is barred by the statute of limitations; (3) plaintiff's claim under the California HSAA is barred by the statute of limitations; (4) plaintiff can recover oversight fees under CERCLA; and (5) plaintiff's authority under the California HSAA is preempted by CERCLA because the site cleanup was located on an Indian reservation.
For the following reasons, the Court holds that: (1) there is a material issue of fact as to whether defendant is an "operator" liable under CERCLA and the California HSAA; (2) the claim under CERCLA is not barred by the statute of limitations; (3) the claim under the California HSAA is not barred by the statute of limitations; (4) plaintiff can recover oversight fees under CERCLA; and (5) plaintiff can bring a claim under the California HSAA even though the cleanup occurred on an Indian reservation.
The State of California ("the State") has brought an action against Celtor Chemical Corporation ("Celtor") and Dr. Carmelo C. Celestre ("Dr. Celestre") under CERCLA and under the California HSAA. The State seeks to recover its costs from the cleanup of hazardous materials from the land on which Celtor was located ("the Celtor site"). Dr. Celestre seeks summary judgment.
The Celtor site is a 2.5 acre parcel within the boundaries of the Hoopa Valley Indian Reservation located in Humbolt County, California. Undisputed Facts, P 12. Celtor operated an ore-processing plant on the site from 1960 to 1962. Id., PP 12-13.
Dr. Celestre, a San Francisco physician, was the president of Celtor and a member of its Board of Directors during the entire period that Celtor operated at the Celtor site. Id., P 4. Dr. Celestre visited the Celtor site approximately once every other month. Id., P 8. The daily operation of the mine and mill at the Celtor site ("the Celtor facilities") was supervised by engineering professionals. Id., P 33.
In 1961, Celtor was found guilty of violating California Fish and Game Code § 5650(f) for polluting the Trinity River. Id., P13. William D. Hawes ("Warden Hawes") was a Warden for the California Department of Fish and Game within whose jurisdiction the Celtor site was located. Warden Hawes attended a number of court proceedings involving Celtor and observed Dr. Celestre's participation in those hearings. The State's Exhibit 3, Hawes Depo. at 40, 70, 93, 117, 223.
The California Department of Health Services identified the Celtor site in 1981 as part of an abandoned site program. Id., P 9. The site was listed on the National Priorities List in 1983. Id. Samples of the soil were taken at the Celtor site in 1983 and showed hazardous concentrations of heavy metals. Id., PP 9-10.
The cleanup of the site ensued. The Environmental Protection Agency ("EPA") conducted the bulk of the cleanup, while the State coordinated and participated in the process.
I. The Summary Judgment Standard
In order to withstand a motion for summary judgment, the opposing party must set forth specific facts showing that there is a genuine issue of material fact in dispute. Fed. R. Civ. P. 56(e). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In the absence of such facts, "the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
In opposing summary judgment, plaintiff is not entitled to rely on the allegations of his complaint. See Fed. R. Civ. P. 56(e). Furthermore, "a party cannot manufacture a genuine issue of material fact merely by making assertions in its legal memoranda." S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines) v. Walter Kidde & Co., 690 F.2d 1235, 1238 (9th Cir. 1982). Rule 56 provides that "when a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or otherwise as provided in this rule, must set forth specific facts [that would be admissible as evidence] showing that there is a genuine issue for trial . . . ." Fed. R. Civ. P. 56(e).
The Court does not make credibility determinations with respect to the evidence offered and is required to draw all inferences in a light most favorable to the nonmoving party. T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986)). Summary judgment is not appropriate "where contradictory inferences may reasonably be drawn from undisputed evidentiary facts . . . ." Hollingsworth Solderless Terminal Co. v. Turley, 622 F.2d 1324, 1335 (9th Cir. 1980).
II. A Genuine Issue of Material Fact Exists as to Whether Dr. Celestre Was an Operator of the Celtor Facilities
Section 107 of CERCLA imposes liability on any "operator" of a facility for the costs incurred in cleaning up hazardous substances. 42 U.S.C. § 9607(a). Section 25323.5 of the California HSAA defines a "responsible party" or a "liable person" by reference to 42 U.S.C. § 9607(a); thus, it also imposes liability on any individual who is an "operator" under CERCLA. California Health and Safety Code § 25323.5. In his motion for summary judgment, Dr. Celestre contends that he was not an "operator" of the Celtor facilities and is therefore not liable under either CERCLA or the California HSAA.
A. The Applicable Standard for "Operator" Liability
Although different standards for "operator" liability have been employed by various courts, this Court is bound by the standard adopted by the Ninth Circuit. In Kaiser Aluminum v. Catellus Dev. Corp., 976 F.2d 1338, 1341 (9th Cir. 1992), the Ninth Circuit held that "operator" liability under CERCLA "only attaches if the defendant had authority to control the cause of the contamination at the time the hazardous substances were released into the environment." The court in Kaiser relied on Edward Hines Lumber Co. v. Vulcan Materials Co., 861 F.2d 155 (7th Cir. 1988). The Ninth Circuit characterized Hines as holding that the defendant was not liable as an "operator" under CERCLA because he "had no authority to control the day-to-day operation of the plant . . ." Kaiser, 976 F.2d at 1341. In this context, this Court interprets Kaiser to hold that, under CERCLA, liability as an "operator" attaches only where the defendant had control over the day-to-day management and administration of the facility.
Dr. Celestre argues that Kaiser is distinguishable because the defendant in that case was not a director or officer of the facility, but instead was hired to excavate the development site and, during that process, spread hazardous waste over parts of the property. Kaiser, 976 F.2d at 1339-40. The Kaiser court held that such allegations of "Ferry's operations on the property tend to show that Ferry had sufficient control over this phase of the development to be an 'operator'" and were therefore sufficient to withstand a motion to dismiss. Id. at 1342. Dr. Celestre argues that the Court should instead adopt an "active participation" standard and hold that Dr. Celestre is not an operator under CERCLA because he did not actively participate in the hazardous waste disposal. Dr. Celestre relies on Levin Metals, Corp. v. Parr-Richmond Terminal Co., 781 F. Supp. 1454 (N.D. Cal. 1991) to support this assertion, contending that the court in Levin determined that "'the weight of authority strongly favors the application of the actual participation/exercise-of- control standard.'" Defendant's Reply at 10 (quoting Levin, 781 F. Supp. at 1456). Dr. Celestre, however, uses this quote out of context and omits the remainder of the Levin court's expression of the applicable standard for "operator" liability. The Levin court held that
an individual cannot be liable as an "operator" under CERCLA Section 107(a)(2) unless that individual actually participates in the operation of the facility at which hazardous substances are disposed of, exercises control over the company immediately responsible for the operation of that facility, or is otherwise intimately involved in that company's operations.
Levin, 781 F. Supp. at 1457 (emphasis added). Under Levin, Dr. Celestre can be held liable as an operator if he exercised control over or was intimately involved with Celtor's operations. Contradictory to what Dr. Celestre implies, this Levin standard is consistent with the standard expressed by Kaiser which would hold Dr. Celestre liable if he had control over the day-to-day management and administration of the Celtor facilities.
The Court therefore holds that an "operator" is liable under CERCLA and the California HSAA if he "had the authority to control the cause of the contamination at the time the hazardous substances were released." Kaiser, 976 F.2d at 1341.
B. Genuine Issue of Material Fact
It is undisputed that Dr. Celestre was Celtor's largest stockholder, was a member of its board of directors, and was its president during the period Celtor operated on the Hoopa Valley Indian Reservation. Furthermore, the State has set forth specific facts from which a reasonable juror could conclude that Dr. Celestre had control over the day-to-day management and administration of the Celtor facilities and is therefore liable as an "operator" under CERCLA and the California HSAA.
The State's Exhibit 3 is a transcript from a deposition in which Warden Hawes testified extensively about Dr. Celestre's appearances in court and the representations Dr. Celestre made at these appearances with respect to criminal charges against Celtor involving dumping into the Trinity River.
Hawes testified that Dr. Celestre represented to the court presiding over these criminal proceedings that he would implement proper waste disposal practices, State's Exhibit 3 at 223; that Dr. Celestre agreed that more ponds would be built to prevent the continuation of the pollution problem, Id. at 70; and that Dr. Celestre agreed that he would make sure that the problem was resolved. Id. at 93. Hawes also testified that Dr. Celestre represented that he would hire and fire people as necessary in order to take care of the pollution problem. Id. at 93.
Dr. Celestre argues that Warden Hawes' statements should not be considered in this motion for summary judgment because nothing was presented to demonstrate that it was a deposition, and that it should therefore be considered an "interview". Dr. Celestre claims that this "interview" was not before a court reporter, and that there is no evidence that Warden Hawes' testimony was truthful. This evidentiary objection is without merit; the required declarations supporting the admissibility of the Hawes deposition were filed by the State with its opposition papers. The State filed a declaration made by the reporter and transcriber stating that the pages included in the exhibit were a true, accurate, and complete transcription of the deposition of William D. Hawes before the U.S. Environmental Protection Agency which was recorded on November 3, 1992. State's Exhibit 3 at 226. Dr. Celestre's evidentiary objection is therefore overruled.
Dr. Celestre also argues that Hawes' statements concerning what Dr. Celestre represented during the criminal proceedings is hearsay and inadmissible. This evidentiary objection is overruled; Dr. Celestre's statements are admissible as admissions pursuant to Fed. Rules of Evid. section 801(d)(2).
The Court is required to view the Hawes deposition in a light most favorable to the nonmoving party, the State, and is not allowed to make any determinations of credibility. T.W. Elec. Serv., 809 F.2d at 630-31. Hawes' statements demonstrate that it is quite possible that Dr. Celestre had the authority to hire and fire employees at the Celtor facilities and to implement practices at the facilities to control the pollution. The Court finds that, based on this evidence, a reasonable juror could find that Dr. Celestre had the authority to control the day-to-day operations at the Celtor facilities. Accordingly, a genuine issue of material fact exists as to whether Dr. Celestre is liable as an "operator" under CERCLA; therefore, Dr. Celestre's motion for summary judgment on the ground that Dr. Celestre was not an "operator" under CERCLA and the California HSAA is DENIED.
III. The State's CERCLA Claim Is Not Barred by the Statute of Limitations
Dr. Celestre argues that summary judgment should be entered against the State's CERCLA claim because it is barred by the statute of limitations. The State filed its CERCLA action against Dr. Celestre on February 22, 1993.
A. The Statute of Limitations
The applicable statute of limitations for recovery cost actions under section 107 is section 113(g)(2), which provides a different limitations period for "removal actions" and for "remedial actions". 42 U.S.C. § 9613(g)(2). Section 113(g)(2) provides in relevant part,
an action for recovery costs . . . must be commenced- (A) for a removal action, within 3 years after completion of the removal action . . . and (B) for a remedial action, within 6 years after initiation of physical on-site construction of the remedial action, except that, if the remedial action is initiated within 3 years after the completion of the removal action, costs incurred in the removal action may be recovered in the cost recovery action brought under this subparagraph.
42 U.S.C. § 9613(g)(2).
B. Removal Action or Remedial Action
The term "remove" or "removal" is defined under CERCLA as follows:
The cleanup or removal of released hazardous substances from the environment, such actions as may be necessary taken in the event of the threat of release of hazardous substances into the environment, such actions as may be necessary to monitor, assess, and evaluate the release or threat of release of hazardous substances, the disposal of removed material, or the taking of such other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare or to the environment, which may otherwise result from a release or threat of release.