Carson Harbor, owner of the Carson Harbor Village Mobile Home Park (the Property), filed suit against Los Angeles County, other local government entities, Unocal, and the former owners of the Property (collectively, "Los Angeles") to recover costs arising from the cleanup of contaminated soil discovered on the Property under the Superfund Act (CERCLA),[1] the Resource Conservation Recovery Act (RCRA),[2] the Clean Water Act (CWA),[3] as well as several state law claims, including nuisance, indemnity, and negligent non-disclosure. After a district court granted summary judgment to Los Angeles on all of the federal claims, the Ninth Circuit reviewed the CERCLA claim. The court found that Carson Harbor had failed to provide sufficient evidence to prove that there was a genuine issue of material fact as to whether it had substantially complied with the public participation and feasibility study requirements of the National Contingency Plan (NCP) under CERCLA. Because Carson Harbor failed to comply with the NCP, the en banc Ninth Circuit upheld the district court's grant of summary judgment to Los Angeles.

Unocal held an oil and gas lease in the Property from 1945 until 1977, when it was converted into a mobile home park. Carson Harbor purchased the Property as a mobile home park in 1983. In 1994, Carson Harbor discovered tar-like and slag material in wetlands[4] on the Property, and hired a national environmental engineering consulting firm, McLaren-Hart, to investigate the contamination. McLaren-Hart discovered the tar and slag materials to contain impermissibly high levels of lead. Carson Harbor subsequently sent notice of the lead contamination to the California Regional Water Quality Control Board (RWQCB), and sent a letter to the mobile home park residents alerting them to the discovery of material contaminated with lead on the Property. McLaren-Hart sent RWQCB a proposed remedial action plan, which RCQWB approved after making slight modifications. The remedial action plan addressed a single course of action: removal of the contaminated materials.

Carson Harbor first notified Unocal of the lead contamination at the Property in a March 10, 1995, letter in which it indicated Carson Harbor intended to hold Unocal responsible for the pollution and requested Unocal's help in remediation. While Unocal initially recommended documenting the pollution but allowing it to remain in place because of its sensitive location, it eventually recognized that McLaren-Hart would remove the contaminated material. Carson Harbor then notified the mobile home park residents by letter that it would remove the contaminated materials in July 1995. The remedial action resulted in 1,042 tons of excavated material being removed from the Property and transported away for off-site disposal. McLaren-Hart sent RWQCB a clean closure report dated Sept. 13, 1995. RWQCB then inspected the Property and sent Carson Harbor a "no further action" letter on Oct. 18, 1995.

In 1997, the district court granted summary judgment in favor of Los Angeles on all the federal claims.[5] A Ninth Circuit panel partially reversed summary judgment on the CERCLA claim,[6] and remanded for the district court to determine whether Carson Harbor had substantially complied with the NCP, which would allow Carson Harbor to recover against Unocal under CERCLA. On remand, the district court granted summary judgment to Unocal because the court found Carson Harbor had failed to demonstrate that there were any issues of material fact as to whether it had substantially complied with the requirements of the NCP public participation and feasibility study requirements.

Under CERCLA, private parties may recover cleanup costs from hazardous waste cleanup actions from parties responsible for the site's contamination.[7] A party wishing to recover under this provision must establish that 1) the property is a "facility" as defined in CERCLA;[8] 2) a "release" or "threatened release" of a "hazardous substance" occurred; 3) the "release" or "threatened release" was the cause of response costs that were "necessary" and "consistent" with the NCP; and 4) the party is seeking to recover from one of the four named classes of potentially liable parties.[9] Under CERCLA, a private party is eligible for cost recovery only if it is able to prove the cleanup costs associated with the remedial action were consistent with the NCP.[10] The NCP specifies the steps a party must undertake in selecting a remedial action plan and cleaning up hazardous waste. A private party remedial action is "consistent with the [NCP] if the action, when evaluated as a whole, is in substantial compliance with . . . and results in a CERCLA-quality cleanup."[11] Among other requirements, the NCP requires that the party seeking cost recovery provide an opportunity for public comment and participation, conduct a remedial site investigation, and prepare a feasibility study.[12]

The Ninth Circuit's review of a grant of summary judgment is de novo.[13] The court will evaluate the evidence in the light most favorable to the nonmoving party, and determine if there are any genuine issues of material fact, or if the moving party is entitled to judgment as a matter of law.[14]

The Ninth Circuit held that Carson Harbor failed to satisfy the public participation requirements of the NCP. The public participation component of the NCP requires that before developing a remedial action plan, the private party planning the cleanup action must interview local officials, community residents, and other interested parties, then prepare a formal community relations plan to ensure opportunities for public involvement.[15] After selecting a remedial action plan, the NCP further requires that the party undertaking the cleanup must publish notice of the action in a local newspaper, provide an opportunity for public comment on the plan, hold a public meeting, make the transcript of the meeting available to the public, and prepare a written summary of comments and responses.[16] The Ninth Circuit held that Carson Harbor failed to fulfill the public participation requirement because "there was never an opportunity for the public at large to comment on the plan."[17]

Carson Harbor argued that the public participation requirement was satisfied by the "substantial involvement" of a governmental body, RWQCB. While the Ninth Circuit has not yet addressed the issue, other circuits have found that if a public agency participates significantly in a remedial action, it may be sufficient to meet the public participation requirements of the NCP.[18] However, the Ninth Circuit determined that it did not need to decide whether significant agency involvement could satisfy the public participation requirement of the NCP because RWQCB's involvement was insignificant. In the Second Circuit, government agency involvement fulfilled the public participation requirement "[w]here a state agency responsible for overseeing remediation of hazardous wastes gives comprehensive input, and the private parties involved act pursuant to those instructions."[19] In contrast, the Ninth Circuit held that the agency involvement was "very limited," the agency "was not actively involved in the remedial action," and while the agency made a site inspection following cleanup, RWQCB "did not take a lead role" in the cleanup activities.[20] Thus, even if the Ninth Circuit was to adopt the rule that significant agency involvement can fulfill the NCP's public participation requirement, the "minor and ministerial involvement" of the state agency was insufficient to substitute for the public participation requirement.[21]

The Ninth Circuit next held that while Carson Harbor substantially complied with the remedial investigation requirement of the NCP, it failed to comply with the feasibility study requirement. The remedial investigation collects data "to adequately characterize the site for the purpose of developing and evaluating effective remedial alternatives."[22] The data collected during the investigation is then used in the feasibility study to develop and evaluate options for the remedial action plan.[23] The feasibility study must include "a detailed analysis . . . on the limited number of alternatives that represent viable approaches to remedial action after evaluation in the screening state."[24] While Carson Harbor failed to conduct a public health assessment, the NCP requires only substantial compliance with the remedial investigation requirement. The Ninth Circuit held that Carson Harbor substantially complied with the remedial investigation requirement because the consultant's analysis included factors such as the Property's physical characteristics, the level of and types of pollutants present, and the potential source of the pollutants.

Carson Harbor failed to substantially comply with the feasibility study requirement of the NCP, however, because the only alternative the remedial action plan analyzed was removal. "One of the hallmarks of the feasibility study requirement is assessing a variety of possible alternatives . . . and choosing the best alternative for the site at issue."[25] The Ninth Circuit rejected Carson Harbor's argument that it was not required to consider other alternatives because removal was the only viable option. The court noted that it had rejected this argument in a similar case, holding that a plaintiff cannot show compliance with the NCP feasibility study requirement if it "does not indicate that other alternatives were even considered."[26] Thus, the Ninth Circuit held that the feasibility study did not meet the requirements of the NCP.

The Ninth Circuit upheld the district court's grant of summary judgment to Los Angeles because Carson Harbor failed to produce sufficient evidence to demonstrate it substantially complied with the public participation and feasibility study requirements for the NCP under CERCLA. Because Carson Harbor failed to provide an opportunity for public comment and failed to produce evidence that it considered more than one alternative in its feasibility study, it failed to substantially comply with the NCP and was not entitled to cost recovery under CERCLA.