Defendant Montrose Chemical Corporation operated a DDT manufacturing plant in Torrance, California. The governments of California and the United States (Trustees) claimed that Montrose released 5.5 million pounds of DDT between 1947 and 1982 into Los Angeles and Long Beach Harbors, allegedly harming the marine environment. In the present case, the Trustees brought suit under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) to recover for natural resources damage to the marine environment as well as response costs incurred in the cleanup of the Montrose site. The defendants filed a motion for summary judgment as to the natural resources damage action based on CERCLA's statute of limitations. A special master denied the motion, but the district court subsequently granted it. The defendants also filed a motion in limine, asking for a cap on liability of fifty million dollars plus response costs. The special master again denied their motion, but the district court sent it back for reconsideration. The motion came back to the district court, and this time the court ordered the parties to submit a written order. After the parties failed to agree on an order, the court entered its own order limiting liability to fifty million dollars plus response costs. The plaintiffs appealed.
On appeal, the Ninth Circuit first held that the Trustees had timely filed the action, and thus the statute of limitations did not preclude any of their claims. According to CERCLA, the statute of limitations began to run on "[t]he date on which regulations [were] promulgated." According to the court, the statute of limitations began to run once all regulations required under section 9651(c) were promulgated, including regulations for simplified assessments and for alternative protocols for conducting assessments. Therefore, March 20, 1987, the date when the final regulations were promulgated, was the date the statute of limitations began to run. Because the government filed the case within three years of that date, the action was timely.
Second, the Ninth Circuit held that the term "incident involving release" is not a term of art meaning "contaminated site." Rather, it includes a series of events over a short period of time that lead to a spill of a hazardous substance. The significance is that liability for each incident involving release is capped at fifty million dollars plus response costs. The Ninth Circuit held that the section of the statute capping liability did not limit collective liability for all releases. Rather, one's liability for each release of a substance is capped at a different amount. Further, the court held that the record was insufficient to decide whether there was only one incident involving release and left the decision for further proceedings. For these reasons, the court reversed the district court's grant of summary judgment and its order limiting liability to fifty million dollars plus response costs.