Harris Investment Holdings, LLC v. BFJ of USA, LLC

Opinion

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PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 25-1919

HARRIS INVESTMENT HOLDINGS, LLC, a Georgia Limited Liability Company,

Plaintiff – Appellant,

v.

BFJ OF USA, LLC; CHOUDRY BUTTAR, a North Carolina Resident; SHEHZAD QUAMAR, a North Carolina Resident; FAISAL M. YASIN, An Illinois Resident,

Defendants – Appellees.

Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Catherine C. Eagles, Chief District Judge. (1:23-cv-00851-CCE)

Argued: March 18, 2026 Decided: July 30, 2026

Before AGEE, Circuit Judge, and TRAXLER and FLOYD, Senior Circuit Judges.

Vacated and remanded for further proceedings by published opinion. Senior Judge Traxler wrote the opinion, in which Judge Agee and Judge Floyd joined.

ARGUED: Martin Arthur Shelton, LEWIS BRISBOIS BISGAARD & SMITH, Atlanta, Georgia, for Appellant. Robert N. Young, CARRUTHERS & ROTH, PA, Greensboro, North Carolina, for Appellee. ON BRIEF: Philip Hinson, LEWIS BRISBOIS BISGAARD & SMITH LLP, Charlotte, North Carolina, for Appellant. Rachel S. Decker, CARRUTHERS & ROTH, PA, Greensboro, North Carolina, for Appellees. USCA4 Appeal: 25-1919 Doc: 43 Filed: 07/30/2026 Pg: 2 of 31

TRAXLER, Senior Circuit Judge:

In 2021, Appellant Harris Investment Holdings bought property in Greensboro,

North Carolina, adjacent to a gas station and convenience store owned by Respondent BFJ

of USA, LLC. After an environmental assessment showed the presence of hazardous

chemicals in the soil and groundwater of Harris’s property, Harris brought this action

against BFJ under the Comprehensive Environmental Response, Compensation and

Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675, and under state law, seeking recovery

of the costs associated with installing a vapor barrier to protect against the risks associated

with the volatile organic compounds (VOCs) found on its property. The district court

granted summary judgment in favor of BFJ on all claims, and Harris now appeals. We

agree with Harris that the district court erred by granting summary judgment, and we

therefore vacate and remand for further proceedings.

I. Statutory Background

CERCLA was enacted “to address the increasing environmental and health

problems associated with inactive hazardous waste sites. The statute encourages private

cleanup of such hazards by providing a cause of action for the recovery of costs incurred”

in the cleanup. Nurad, Inc. v. William E. Hooper & Sons, 966 F.2d 837, 841 (4th Cir. 1992).

CERCLA applies when there is a “release” or a “threatened release” of a “hazardous

substance” at a “facility.” 42 U.S.C. § 9607(a). A “release” is broadly defined as “any

spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,

leaching, dumping, or disposing into the environment.” 42 U.S.C. § 9601(22). “Facility”

is also a broad term under the statute, encompassing

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(A) any building, structure, installation, equipment, pipe or pipeline . . . , well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located . . . .

42 U.S.C. § 9601(9).

CERCLA identifies the hazardous substances within its scope as those designated

as hazardous by the Federal Water Pollution Control Act, the Solid Waste Disposal Act,

the Clean Air Act, and the Toxic Substances Control Act. See 42 U.S.C. § 9601(14)(A)-

(F). However, CERCLA expressly excludes petroleum from its scope, stating that the term

“hazardous substance”

does not include petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance under subparagraphs (A) through (F) of this paragraph, and the term does not include natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas).

42 U.S.C. § 9601(14). This carve-out is generally referred to as the “petroleum exclusion.”

This circuit has not yet addressed the scope of the petroleum exclusion, and we will discuss

it in more detail later in this opinion. For now, it suffices to say that the prevailing view is

that unadulterated crude oil and crude-oil derivatives like gasoline fall within the scope of

the petroleum exclusion despite the fact that they naturally contain substances that are

individually listed as hazardous under the statutes specified in § 9601(14). See, e.g.,

Wilshire Westwood Assocs. v. Atlantic Richfield Corp., 881 F.2d 801, 810 (9th Cir. 1989)

(concluding that the petroleum exclusion applies “to unrefined and refined gasoline even

though certain of its indigenous components and certain additives during the refining

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process have themselves been designated as hazardous substances within the meaning of

CERCLA”).

CERCLA “imposes broad and strict liability for the costs of cleaning up hazardous

waste sites without regard to whether the persons assigned liability under the Act placed

the waste material on the site or had knowledge of the waste materials’ presence.” Crofton

Ventures Ltd. P’ship v. G & H P’ship, 258 F.3d 292, 296 (4th Cir. 2001). Actions seeking

to recover response costs may be brought against certain statutorily defined categories of

persons, including past and current owners of the facility and those who transport or

dispose of hazardous substances. See 42 U.S.C. § 9607(a)(1)-(4). “Those who fall within

one of the categories described by the statute are known as ‘potentially responsible

persons,’ and are strictly liable for cleanup costs subject only to the statute’s limited

defenses.” Axel Johnson, Inc. v. Carroll Carolina Oil Co., 191 F.3d 409, 413 (4th Cir.

1999).

A private-party CERCLA plaintiff seeking recovery of its response costs makes a

prima facie case by showing that:

(1) the defendant is a potentially responsible person . . . ; (2) the site constitutes a facility; (3) a release or a threatened release of hazardous substances exists at the facility; (4) the plaintiff has incurred costs responding to the release or threatened release of hazardous substances . . . ; and (5) the response costs conform to the National Contingency Plan.

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PCS Nitrogen Inc. v. Ashley II of Charleston LLC, 714 F.3d 161, 167-68 (4th Cir. 2013)

(cleaned up). 1 “Contrary to the rule followed in most areas of the law, the burden of proof

as to causation in a CERCLA case lies with the defendant.” Westfarm Assocs. Ltd. P’ship

v. Washington Suburban Sanitary Comm’n, 66 F.3d 669, 681 (4th Cir. 1995).

The plaintiff must prove only that contaminants which were once in the custody of the defendant could have travelled onto the plaintiff’s land, and that subsequent contaminants (chemically similar to the contaminants once existing in defendant’s custody) on the plaintiff’s land caused the plaintiff to incur cleanup costs. . . . The plaintiff need not produce any evidence that the contaminants did flow onto its land from the defendant’s land. Rather, once plaintiff has proven a prima facie case, the burden of proof falls on the defendant to disprove causation.

Id. A CERCLA defendant likewise bears the burden of proving its entitlement to any of

the statute’s limited defenses or exemptions, including the petroleum exclusion. See PCS

Nitrogen, 714 F.3d at 185 (“[C]urrent owners and operators seeking to avoid CERCLA’s

strict liability scheme must meet the requirements necessary to claim the narrow defenses

and exemptions specifically established by Congress.”); Johnson v. James Langley

Operating Co., 226 F.3d 957, 963 n.4 (8th Cir. 2000) (“[O]nce plaintiffs have presented

evidence to support their allegation of a release or threatened release, defendants bear the

burden of showing the petroleum exclusion applies.”); Tosco Corp. v. Koch Indus., Inc.,

1 The National Contingency Plan “is EPA’s regulatory template for a CERCLA quality cleanup.” Pub. Serv. Co. of Colorado v. Gates Rubber Co., 175 F.3d 1177, 1181 (10th Cir. 1999) (cleaned up). “It sets performance standards, identifies methods for investigating the environmental impact of a release or threatened release, and establishes criteria for determining the appropriate extent of response activities.” Id. (cleaned up); see 40 C.F.R. § 300.1 (“The purpose of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP) is to provide the organizational structure and procedures for preparing for and responding to discharges of oil and releases of hazardous substances, pollutants, and contaminants.”). 5 USCA4 Appeal: 25-1919 Doc: 43 Filed: 07/30/2026 Pg: 6 of 31

216 F.3d 886, 894 n.5 (10th Cir. 2000) (“In any CERCLA case, once the plaintiff alleges

a release or threatened release of hazardous substances, which Tosco has alleged and

supported with evidence here, the party asserting the benefit of the petroleum exclusion

bears the burden of proof on that issue.”).

II. Factual Background

In 2008, Defendant BFJ purchased a parcel of land at 2209 East Bessemer Avenue

in Greensboro, North Carolina. A gas station and convenience store had been in operation

on the property for decades before BFJ bought it, and BFJ continues to operate a gas station

and store on the site.

At some point in the late 1950s, prior owners of the Bessemer Avenue property

installed four underground storage tanks (USTs) for kerosene, waste oil, and heating oil.

Those tanks were closed in place 2 in 1996. In 1982, the then-owners installed four USTs

for gasoline and diesel fuel; those tanks were removed in 2007. After purchasing the

property, BFJ installed two USTs on the property in 2008; those tanks are still in operation.

In 1996, the then-owners of the site decided to permanently close the first group of

tanks after receiving a Notice of Violation for failure to have a leak detection system for

the kerosene or waste oil USTs. Soil removed during the closure was stained and contained

product odor, which indicated a release of the substances contained in the tanks. Although

no groundwater samples were taken, soil samples taken during the closure showed the

2 The tanks were emptied, cleaned, then filled and sealed with Portland cement, and left in place underground.

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presence of petroleum-related substances in the soil beneath the tanks, including oil and

grease found below the waste oil tank. As required by state law, the release was reported

to the appropriate state agency and was designated as UST Incident No. 16347 in North

Carolina’s public database of UST releases. An additional environmental assessment of the

property conducted in 2006 found petroleum constituents in the groundwater at a level

below the then-current regulatory standards. After the 2006 assessment, the State issued a

letter stating that no further remedial action was required as to this incident.

A release was also discovered when the second set of USTs were removed in 2007;

that release was designated as UST Incident No. 37405 in North Carolina’s UST database.

In 2008, a limited environmental assessment performed in connection with that release

found above-regulatory-standard levels of benzene and other petroleum hydrocarbons in

the soil and groundwater. In May 2009, the State issued a notice stating that no further

remedial action was required as to that incident but noting that the property was suitable

only for industrial or commercial use because the contamination exceeded residential

standards, and that the groundwater was not suitable for use as a water supply. The property

owners were thus required to provide public notice of the contamination and file a Notice

of Residual Petroleum with the County Register of Deeds.

Since BFJ purchased the Bessemer Street property and installed the third set of

USTs, the State has conducted compliance inspections every two or three years. After each

of the inspections in 2012, 2015, 2018, 2020, and 2022, the State cited the facility for at

least nine violations of the UST regulations. The violations include failure to test the USTs

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leak-detection and spill-prevention systems; failure to conduct necessary visual

inspections; and failure to contain and report spills and overfills.

In 2021, Plaintiff Harris bought the property at 617 N. English Street, which adjoins

BFJ’s Bessemer Street property. Harris’s property had been operated as a car repair facility

from the 1960s until shortly before Harris bought it, and a portion of the property had been

used as a junkyard for old cars since at least 1999. Harris, which planned to build an office

for a commercial staffing company on the site, hired Summit Engineering to perform an

environmental assessment of the property. The Phase II assessment completed in June 2022

found VOCs and other hazardous substances in the groundwater on Harris’s property at

concentrations above regulatory standards. To mitigate the hazards to people who would

be working in the building, Harris installed a vapor-intrusion mitigation system (“vapor

barrier”) during the construction process.

Harris subsequently filed this action against BFJ and its members, asserting claims

under CERCLA and under North Carolina law. The district court issued a scheduling order

requiring, inter alia, Harris’s disclosure of expert testimony by August 15, 2024, BFJ’s

expert disclosure by September 27, 2024, and Harris’s rebuttal disclosure by October 11,

2024. Under the scheduling order, discovery closed on December 31, 2024.

Harris retained Peter de Haven as its expert, and de Haven’s initial report was timely

disclosed. In the report, de Haven noted that the report was prepared in order to address

two questions: whether the operation of “fuel facilities” on BFJ’s property “cause[d] or

contribute[d] to contamination on [Harris’s] property” and thus warranted the installation

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of the vapor barrier, J.A. 468; and whether the vapor barrier was “designed to the

appropriate standard of care” and reasonably priced, J.A. 468.

In the report, de Haven outlined the history of both properties and discussed the

environmental tests and assessments that had been performed. de Haven explained that

because VOCs “drive vapor intrusion risk,” his summaries of the soil and groundwater

impacts of the 1996 and 2007 releases “are focused on VOCs and are not necessarily

exhaustive descriptions of all sampling that have occurred during a particular

investigation.” J.A. 474.

As to BFJ’s site, de Haven noted that only soil samples, but no groundwater

samples, were taken in 1996 when the release (UST Incident No. 16347) was discovered

in connection with the closure of the first batch of USTs in 1996. However, as part of a

2006 reevaluation of the incident, new soil and groundwater samples were taken. See J.A.

475. According to de Haven’s report, “[t]he soil samples were analyzed for VOCs, semi-

volatile organic compounds (SVOCs), volatile petroleum hydrocarbons (VPH), extractable

petroleum hydrocarbons (EPH), and lead and chromium.” Id. Consistent with his focus on

VOCs, de Haven did not report the results of the lead or chromium tests and noted only

that “[t]he sole VOC identified above laboratory method detection limits was methyl tert

butyl ether.” Id.

Regarding the 2007 UST leaks (Incident No. 37045), de Haven stated that soil tests

showed high levels of petroleum hydrocarbons under the USTs and the dispensers and

product lines. VOCs including benzene were also identified in the soil that was excavated

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laterally from the tanks in concentrations higher than regulatory standards. Groundwater

samples likewise showed levels of VOCs well above regulatory standards.

As to Harris’s property, de Haven summarized the results of the environmental

assessments performed by Summit Engineering after Harris’s purchase. de Haven noted

that Summit tested the soil and groundwater for VOCs and other petroleum hydrocarbons,

and for various hazardous heavy metals, including chromium and hexavalent chromium.

As with his discussion of BFJ’s site, however, de Haven only provided sampling results

for VOCs. See J.A. 477 (“As this matter involves the installation of a [vapor barrier] due

to identified VOC impacts in the subsurface, the following discussion is limited to the VOC

results.”). de Haven explained that Summit’s testing showed low concentrations of VOCs

in the soil, but that VOCs were found in the groundwater at levels exceeding regulatory

standards.

de Haven’s report also addressed whether BFJ’s property was the likely source of

the contamination on Harris’s property. Based on the topography of the region and the

properties and the location of drainage basins, de Haven stated that the groundwater from

BFJ’s property would be expected “to flow toward the northeast”—i.e., towards Harris’s

property. J.A. 480. Although monitoring wells on Harris’s property showed water flowing

in a more easterly direction, de Haven did not find those limited results to be conclusive

given that “constituent fate and transport can be subject to additional variation in flow

directions due to a variety of factors, including fracture flow systems common in Piedmont

geology, transverse dispersion of constituents, and lateral migration of petroleum

constituent vapors in the subsurface beyond plume boundaries.” J.A. 486. In de Haven’s

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view, “the groundwater flow data are not conclusive,” and he believed that additional data

collection from both properties “would better inform the understanding of groundwater

flow between the two properties.” J.A. 481. Nonetheless, de Haven found no clear evidence

that any source on Harris’s property was responsible for the soil or groundwater

contamination, see J.A. 481, and he identified BFJ’s property as “a potential source of

groundwater impacts to [Harris’s] property.” J.A. 487.

After de Haven’s report was disclosed, BFJ timely disclosed the report and opinions

of its own expert, James Cornette. Cornette reviewed aerial photographs of Harris’s

property taken over the course of several years and observed areas of darkened soil in each

of the pictures. Because the site had been used as an automotive repair business, Cornette

believed the darkened areas of soil had been stained by releases from the cars and trucks

kept on the site and that it was “logical” to conclude that the substance that was released

was “petroleum, or at least [was] primarily petroleum.” J.A. 707. Cornette also addressed

the groundwater flow question, opining that groundwater from BFJ’s property would carry

contaminants eastward and away from Harris’s property. Cornette therefore believed that

the “[c]ontamination associated with the Plaintiffs’ tract likely originated within the

confines of their own property.” J.A. 708.

Harris submitted a timely rebuttal report from de Haven addressing Cornett’s

conclusions. de Haven pointed out various problems with Cornette’s assumption that all

soil that appeared dark in the photographs was stained soil—for example, wet soil would

appear dark in a picture, as might a section of soil whose top layer was disturbed by vehicles

moving around in an unpaved parking area. de Haven also noted that if the contamination

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originated from the auto repair business on Harris’s property, “one would expect similar

constituents in both soil and groundwater.” J.A. 520. Instead, the groundwater was

contaminated with high concentrations of substances “that are characteristic of a gasoline

release,” while the soil was contaminated with low concentrations of substances “that are

not typically associated with gasoline releases but may be present due to a motor oil

release.” J.A. 520.

de Haven’s rebuttal report also challenged Cornette’s conclusions about

groundwater flow. While acknowledging that “the limited data available for [Harris’s]

property indicate a flow that on average may be toward the east,” J.A. 522, de Haven

explained that the “groundwater flow direction estimates are descriptions of the hydraulic

gradient, which can be thought of as the slope of the water table.” J.A. 522. According to

de Haven, “heterogeneity in soil lithologies”—structural variations in the geological

material, including layers of different rock types or soil sediments—“can lead to the

transport of groundwater in directions that are not parallel to the hydraulic gradient,” such

that it was “plausible that oblique flow has occurred toward the north or northeast, resulting

in the migration of [hazardous substances] originating at [BFJ’s] property onto [Harris’s]

property.” J.A. 522.

Under the district court’s scheduling order, the discovery period ended on December

31, 2024. On December 9, Harris served notice requesting entry on BFJ’s property in order

to install two temporary monitoring wells and conduct additional environmental sampling

and testing. After BFJ objected, Harris filed a motion seeking to compel the requested

entry. The magistrate judge denied the motion, in part because “the discovery is specifically

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sought to supplement expert reports and opinions, but the expert deadlines have already

passed, and . . . . [Harris] failed to show why this discovery could not have been sought

and included earlier by the applicable deadlines.” J.A. 278-79.

A couple of weeks after the denial of Harris’s motion to compel, BFJ filed a motion

seeking summary judgment on all claims. As to the CERCLA claim seeking response costs,

BFJ argued, inter alia, that Harris failed to make a prima facie case because “there is no

evidence of any current release or threatened release from the USTs installed and currently

used on the Property while owned and/or operated by BFJ,” J.A. 289, and because Harris

failed to prove that any release from BFJ’s property caused the contamination on Harris’s

property. Even if a prima facie case had been made, BFJ contended it was entitled to

summary judgment under the petroleum exclusion because any releases from the property

“could only be gasoline or diesel fuel.” J.A. 294. BFJ also contended that Harris’s failure

to prove causation was fatal to all claims asserted under state law.

As part of its opposition to the motion for summary judgment, Harris included a

declaration from de Haven. In the declaration, which de Haven said was primarily intended

to provide “explanations of the opinions provided in [his] prior reports,” J.A. 1732, de

Haven responded to some of BFJ’s summary-judgment arguments. As to BFJ’s assertion

that only petroleum products could ever have been discharged from its site, de Haven noted

that prior testing revealed the presence of chromium, “a non-petroleum related

constituent,” in the soil and groundwater of both properties. J.A. 1736. BFJ argued in its

reply that de Haven’s declaration should not be considered because it contained new

opinions submitted well after the deadline for disclosing expert opinions and reports.

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The district court granted judgment in favor of BFJ on all claims. Agreeing with

BFJ that de Haven’s summary judgment declaration should not be considered, the district

court held that while Harris made a prima facie claim for recovery of response costs under

CERCLA, BFJ’s evidence showed that the only possible releases were of petroleum

constituents falling within the scope of the petroleum exclusion, and Harris’s evidence

failed to create a question of fact about the substances released. As to the state-law claims,

the district court noted that each claim asserted by Harris required proof of proximate

cause, and the court found Harris’s evidence of causation—de Haven’s reports—

insufficient.

Harris appeals, challenging the district court’s rejection of its CERCLA claims and

state-law claims and the denial of its motion seeking entry on BFJ’s property to install

monitoring wells and conduct environmental testing.

III. CERCLA Claims

We begin with the CERCLA claims. The district court held that Harris made the

required prima facie showing, a conclusion that BFJ does not dispute on appeal. The

district court nonetheless concluded that BFJ was entitled to judgment in its favor by virtue

of the petroleum exclusion.

Recognizing that the burden of proof was on BFJ, the district court concluded that

the evidence relied on by BFJ showed that “any released substances were unadulterated

petroleum products.” J.A. 1817. As support for its claim, BFJ pointed to de Haven’s expert

reports, which repeatedly used the phrase “petroleum constituents” when describing the

substances present on the properties and noted the existence of prior “petroleum releases”

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on BFJ’s property; and the 2008 site assessment of BFJ’s property, which also described a

“petroleum release” on BFJ’s property. In the district court’s view, this evidence was

sufficient to show the applicability of the petroleum exclusion, and Harris’s evidence failed

to create a question of fact.

In reaching this conclusion, the district court rejected Harris’s argument that other

evidence in the record showed the presence of substances outside the scope of the

petroleum exclusion. The court first declined to consider de Haven’s statements in his

summary-judgment declaration that chromium was found on both properties. In the district

court’s view, de Haven’s discussion of chromium amounted to opinion testimony that was

not included in his initial or rebuttal report, and the court therefore excluded the chromium

evidence because it was not timely disclosed. See Fed. R. Civ. P. 37(c)(1) (“If a party fails

to provide information or identify a witness as required by Rule 26(a) or (e), the party is

not allowed to use that information or witness to supply evidence on a motion, at a hearing,

or at a trial, unless the failure was substantially justified or is harmless.”).

The court also rejected Harris’s argument that substances not covered by the

petroleum exclusion could have leaked from the group of tanks that were closed in 1996,

which were used for kerosene, heating oil, and waste oil:

As the defendants point out, those tanks were closed nearly 30 years ago. At the time, there was evidence of a petroleum release on the property. But that proves BFJ’s point that the release was petroleum, and Harris has not pointed to any evidence that the release involved anything other than petroleum. Nor has it pointed to evidence that there has since been a non-petroleum release from those tanks.

J.A. 1820 (cleaned up).

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On appeal, Harris contends the district court erred by incorrectly construing and

applying the petroleum exclusion, by refusing to consider de Haven’s summary-judgment

declaration, and by not properly viewing the evidence in its favor.

A. Petroleum Exclusion

We first address Harris’s claim that the district court erred in determining the scope

of the petroleum exclusion. “As in all statutory construction cases, we begin with the

language of the statute.” Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002). “The

first step is to determine whether the language at issue has a plain and unambiguous

meaning with regard to the particular dispute in the case. The inquiry ceases if the statutory

language is unambiguous and the statutory scheme is coherent and consistent.” Id. (cleaned

up). “The plainness or ambiguity of statutory language is determined by reference to the

language itself, the specific context in which that language is used, and the broader context

of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997).

As outlined above, CERCLA applies to releases and threatened releases of

“hazardous substances” and defines “hazardous substances” as those substances listed as

hazardous under five specified statutes. See 42 U.S.C. § 9601(14)(A)-(F). CERCLA does

not apply to releases or threatened releases of petroleum, however, because the petroleum

exclusion provides that “the term ‘hazardous substance’ . . . does not include petroleum,

including crude oil or any fraction thereof which is not otherwise specifically listed or

designated as a hazardous substance under subparagraphs (A) through (F) of this

paragraph.” Id. (emphasis added).

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The italicized language above is at the heart of this issue; Harris believes this

language makes the petroleum exclusion inapplicable to releases of any petroleum product

containing an individually listed hazardous substance. As Harris points out, many of the

indigenous components of petroleum and crude oil, including benzene, are individually

listed as hazardous under the statutes specified in § 9601(14). See Wilshire Westwood, 881

F.2d at 803 (“It is undisputable that benzene, toluene, xylene, ethylbenzene and lead are

hazardous substances . . . pursuant to several of the statutes set forth in Section

9601(14)(A)-(F). We take judicial notice that benzene, toluene, xylene, ethylbenzene and

lead also are all indigenous components of crude oil.”). Harris therefore argues that because

benzene and other individually listed substances have been documented in the soil and

groundwater, the product that was released on BFJ’s property does not fall within the

petroleum exclusion. We disagree.

Although compounds such as benzene, which are listed as hazardous under the

statutes referenced in the petroleum exclusion, are indigenous to crude oil, the mere

presence of those compounds does not render the petroleum exclusion inapplicable, as

Harris suggests. Instead, the “not otherwise specifically listed or designated as a

hazardous” language of the petroleum exclusion must be understood as modifying only the

word “fraction.” See Lockhart v. United States, 577 U.S. 347, 351 (2016) (explaining that

under the “rule of the last antecedent . . . a limiting clause or phrase should ordinarily be

read as modifying only the noun or phrase that it immediately follows”) (cleaned up). Thus,

we believe the petroleum exclusion is most naturally read as encompassing crude oil and

any fractions of crude oil, so long as the specific fraction has not been individually listed

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as hazardous. See Wilshire, 881 F.2d at 804 (concluding that “the doctrine of the last

antecedent . . . . compels the construction that ‘hazardous substance’ does not include any

fraction of crude oil which has been listed or designated as a hazardous substance under

Section 9601(14)(A)–(F)”); United States v. Alcan Aluminum Corp., 755 F. Supp. 531, 539

(N.D.N.Y. 1991) (“[W]hat does come within the ambit of the ‘petroleum exclusion’ is the

oil or oil fraction which naturally contains the hazardous substance(s) unless the fraction

itself is specifically listed or designated as a hazardous substance.”) (emphasis added).

Although CERCLA does not define “fraction,” the word has an established meaning

in the context of the petroleum industry. “Fractions” of crude oil are the useful petroleum

products created from crude oil through the refining process of “fractional distillation,”

which involves discharging heated crude oil into a distillation tower or unit, where “the

liquids and vapors separate into petroleum components, called fractions, according to their

boiling points.” U.S. Energy Information Administration, Oil & Petroleum Products

Explained, https://www.eia.gov/energyexplained/oil-and-petroleum-products/refining-

crude-oil-the-refining-process.php [https://perma.cc/C7XY-DMFJ]; see also Wilshire

Westwood, 881 F.2d at 803; BP Prods. N. Am. Inc. v. United States, 716 F. Supp. 2d 1291,

1296 (Ct. Int’l Trade 2010). “The most important fractions of petroleum” are produced

through fractional distillation, including “naptha, gasoline, fuel oil, kerosene, and tarry or

waxy residues.” Richard J. Lewis, Sr., Hawley’s Condensed Chemical Dictionary 582

(15th ed. 2007) (defining “fraction” and “fractional distillation”).

Because no crude oil fraction is listed as hazardous under the relevant statutes, see

42 U.S.C. § 9601(14)(A)–(F), the mere presence of hazardous substances like benzene does

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not automatically render the petroleum exclusion inapplicable. Crude oil fractions are

products of the refining process and necessarily contain hazardous substances, as the

indigenous components of crude oil are likewise present in crude oil fractions and

additional hazardous substances are often added during the refining process. Thus, for the

petroleum exclusion to have any vitality, it must be understood to encompass what is in

fact present in all crude oil fractions: hazardous substances indigenous to crude oil and the

crude-oil refining process. See Memorandum from EPA General Counsel, Scope of the

CERCLA Petroleum Exclusion Under Sections 101(14) and 104(a)(2) at p.5 (July 31,

1987), https://www.epa.gov/sites/default/files/2013-09/documents/petro-exclu-mem.pdf

[https://perma.cc/DA2Z-8QVY] (“Because . . . hazardous substances [such as benzene] are

found naturally in all crude oil and its fractions, they must be included in the term

‘petroleum,’ for [the petroleum exclusion] to have any meaning.”); 3 United States v.

Gurley, 43 F.3d 1188, 1199 (8th Cir. 1994) (“A petroleum product may be exempted from

CERCLA even though certain of its indigenous components and certain additives added

3 While we are no longer required to give deference to the EPA’s views, we remain free, as always, to factor the agency’s views into our analysis. See Loper Bright Enters. v. Raimondo, 603 U.S. 369, 394 (2024) (“[C]ourts must exercise independent judgment in determining the meaning of statutory provisions. In exercising such judgment, though, courts may—as they have from the start—seek aid from the interpretations of those responsible for implementing particular statutes. Such interpretations constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance consistent with the APA.”) (cleaned up). Given the EPA’s long experience in applying the Act and its deep understanding of the petroleum industry and the products it creates, we find the agency’s views and expertise very helpful in our effort to determine the best meaning of the petroleum exclusion.

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during the refining process have themselves been designated as hazardous substances

within the meaning of CERCLA.”) (cleaned up); Wilshire, 881 F.2d at 810 (“[T]he

petroleum exclusion in CERCLA does apply to unrefined and refined gasoline even though

certain of its indigenous components and certain additives during the refining process have

themselves been designated as hazardous substances within the meaning of CERCLA.”).

Although the presence of indigenous hazardous substances does not automatically

render the petroleum exclusion inapplicable, the petroleum exclusion does not provide a

safe haven in cases where petroleum products have been contaminated with additional

hazardous substances. As the EPA has explained,

contaminants present in used oil or any other petroleum substance are not within the petroleum exclusion. “Contaminants” . . . are substances not normally found in refined petroleum fractions or present at levels which exceed those normally found in such fractions. If these contaminants are CERCLA hazardous substances, they are subject to CERCLA response authority and liability.

1987 EPA Petroleum Exclusion Memorandum at p.1,

https://www.epa.gov/sites/default/files/2013-09/documents/petro-exclu-mem.pdf

[https://perma.cc/DA2Z-8QVY]; see Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886, 893

(10th Cir. 2000) (“Congress intended that the petroleum exclusion address oil spills, not

releases of oil which has become infused with hazardous substances.”); Gurley, 43 F.3d at

1199 (“[H]azardous substances which are added to petroleum or which increase in

concentration solely as a result of contamination of the petroleum during use are not part

of the ‘petroleum’ and thus are not excluded from CERCLA.”) (cleaned up); Cose v. Getty

Oil Co., 4 F.3d 700, 704 (9th Cir. 1993) (“If a specifically listed hazardous substance is

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indigenous to petroleum and is present as a result of the release of petroleum, such

substance will fall within the petroleum exclusion unless it is present at a concentration

level that exceeds the concentration level that naturally occurs in the petroleum product.”).

We therefore reject Harris’s claim that the district court improperly interpreted the

scope of the petroleum exclusion. The question, then, is whether the district court erred by

concluding that the evidence showed that any releases only involved compounds

encompassed by the petroleum exclusion.

B. Summary Judgment Evidence

As discussed above, the district court held that the evidence pointed to by BFJ

showed that any releases were of petroleum products, which satisfied BFJ’s obligation to

establish the applicability of the petroleum exclusion, and that Harris failed to identify any

admissible evidence showing the presence of non-petroleum substances. We agree with

Harris that the district court’s analysis was flawed.

BFJ’s position is that “the only substance that could have been released on BFJ’s

property was petroleum since it has only been utilized as a gas station before and after

BFJ’s purchase.” Brief of Respondent at 18. In support of this argument, BFJ points to the

2008 environmental assessment of the property, which identified the presence of

petroleum-based substances on the property. BFJ also points to de Haven’s initial report,

which refers to “petroleum releases” on the property and recounts the results of soil and

groundwater sampling showing the presence of petroleum constituents. While we agree

that these reports show that there were releases of petroleum products on BFJ’s property,

the question is not simply whether petroleum products were released, but whether the

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petroleum products that were released were contaminated with hazardous substances. And

as to that question, the evidence relied upon by BFJ simply does not support its claim as a

matter of law.

Although de Haven’s report discusses petroleum releases on BFJ’s property and

repeatedly refers to the presence of petroleum constituents, de Haven never purported to

identify all of the substances present on the property, nor did he ever assert that only

petroleum products were released or identified on the property. de Haven’s report

explained that because he was charged with determining whether installation of the vapor

barrier was warranted, the report would focus on “volatile organic compounds (VOCs)[,

which] drive vapor intrusion risk,” and that the report’s summaries of the investigations of

BFJ’s property “are not necessarily exhaustive descriptions of all sampling that may have

occurred during a particular investigation.” J.A. 474. And when discussing the testing

conducted on Harris’s property, de Haven likewise noted that while soil and groundwater

samples had been tested for the presence of heavy metals, his discussion was “limited to

the VOC results” because “this matter involves the installation of a VIMS due to identified

VOC impacts in the subsurface.” J.A. 477. Because de Haven’s report explicitly disavowed

any effort to document all hazardous substances on the properties, the report does not

support BFJ’s assertion that the only substances that could ever have been released were

petroleum products falling within the petroleum exclusion.

The 2008 environmental assessment suffers from similar issues. While the

assessment documents a petroleum release from BFJ’s property and discusses soil

sampling showing the presence of petroleum hydrocarbons, it does not indicate whether

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any testing was conducted for chromium or other non-petroleum hazardous substances.

The assessment is thus evidence that a petroleum release occurred, but it is not evidence

that only petroleum was released.

Although BFJ bears the burden of proving that the petroleum exclusion applies, BFJ

contends that showing the existence of petroleum releases was enough to carry that burden.

According to BFJ, it was not obligated to prove that no other substance was released with

the petroleum unless Harris first pointed to evidence showing that the petroleum was

contaminated with a non-petroleum hazardous substance. BFJ claims Harris did not

identify any such evidence, and that it therefore established the applicability of the

petroleum exclusion by showing that petroleum products were released.

Preliminarily, we question BFJ’s understanding of its burden of proof. As discussed,

CERCLA is a strict-liability scheme that inverts the usual burdens of proof; once a

CERCLA plaintiff satisfies the relatively minimal elements of a prima facie claim, the

defendant bears the burden of proving the applicability of one of the statute’s limited

defenses. The petroleum exclusion creates one of those limited defenses, by excluding from

CERCLA’s reach releases of “petroleum.” As explained above, “contaminants present in

used oil or any other petroleum substance are not within the petroleum exclusion. . . . If

these contaminants are CERCLA hazardous substances, they are subject to CERCLA

response authority and liability.” 1987 EPA Petroleum Exclusion Memorandum at p.1

https://www.epa.gov/sites/default/files/2013-09/documents/petro-exclu-mem.pdf

[https://perma.cc/DA2Z-8QVY]. In our view, a defendant seeking to establish the

23 USCA4 Appeal: 25-1919 Doc: 43 Filed: 07/30/2026 Pg: 24 of 31

applicability of the petroleum exclusion bears the burden of proving that the petroleum

released was not contaminated with non-petroleum hazardous substances. 4

But even if BFJ were right and Harris was first obliged to present some evidence of

a release of contaminated petroleum, Harris’s evidence in fact does just that. The evidence

before the district court, including de Haven’s initial report, showed that in the late 1950s,

the prior owners of BFJ’s property installed an underground tank to collect and store waste

oil generated by the business. That tank, which had no system for detecting leaks, was in

use until it was closed in 1996. The owners decided to close the waste-oil tank (and the

other USTs installed at the same time) in place after they received notice that the lack of a

leak-detection system violated state requirements. During the closing-in-place process, oil

and grease were found in the soil below the waste oil tank.

Oil can easily pick up contaminants through use, and it likewise can be

contaminated by rust or other particles absorbed from the metal tank in which it is stored.

See, e.g., United States v. Alcan Aluminum Corp., 964 F.2d 252, 266 (3d Cir. 1992) (“[A]

plain reading of the [petroleum exclusion] does not warrant the inclusion of oil which has

become contaminated with hazardous substances through use.”) (cleaned up); Members of

Beede Site Grp. v. Fed. Home Loan, Mortg. Corp., 968 F. Supp. 2d 455, 461 (D.N.H. 2013)

4 We note that the district court also shared our understanding of the scope of BFJ’s burden of proof. See J.A. 1817 (“To prevail on a CERCLA claim for cost recovery, a plaintiff must prove, among other things, that there was a release or a threatened release of hazardous substances. But there is a statutory exception: if a defendant proves that the released substances were unadulterated petroleum products, then the plaintiff cannot recover.”).

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(“[T]he normal use of engine oil adds hazardous substances that do not fall within the

Petroleum Exclusion.”); id. (discussing testimony that used motor oil “would typically

include metals, acids, post-refining additives and additive byproducts, gasoline combustion

by products (from engine blowby) and possibly antifreeze”) (cleaned up); United States v.

W. Processing Co., 761 F. Supp. 713, 722 (W.D. Wash. 1991) (discussing evidence that

“scale . . . composed in part of the oxides of chromium and nickel” forms inside steel

storage tanks and is absorbed by the sludge at the bottom of the tank); 1987 EPA Petroleum

Exclusion Memorandum at p.10, https://www.epa.gov/sites/default/files/2013-

09/documents/petro-exclu-mem.pdf [https://perma.cc/DA2Z-8QVY] (noting that “used oil

is generally contaminated by definition” but recognizing that “the impurities added by use

may not be CERCLA hazardous substances”).

Accordingly, we believe that the evidence of the leaking waste-oil tank on BFJ’s

property at a minimum raised a question of fact about the release of contaminated oil falling

outside the scope of the petroleum exclusion. Because BFJ did not come forward with

evidence showing that only unadulterated petroleum was released, the district court

therefore erred by granting summary judgment to BFJ.

C. Exclusion of Summary Judgment Declaration

As outlined above, even without consideration of the chromium identified in de

Haven’s summary-judgment declaration, the evidence of a release from the waste-oil tank

on BFJ’s property alone requires reversal of the grant of summary judgment. Nonetheless,

because questions may arise after remand about the permissible scope of any testimony

25 USCA4 Appeal: 25-1919 Doc: 43 Filed: 07/30/2026 Pg: 26 of 31

from de Haven, we believe it would be prudent to address Harris’s challenge to the district

court’s exclusion of de Haven’s declaration.

(1)

Rule 26 of the Federal Rules of Civil Procedure requires a party seeking to present

expert testimony to disclose the identity of the expert and provide a written report

containing “a complete statement of all opinions the witness will express and the basis and

reasons for them,” as well as “the facts or data considered by the witness” and “any exhibits

that will be used to summarize or support” the expert’s opinion. Fed. R. Civ. P. 26(a)(2)(B).

The disclosures must be made “at the times and in the sequence that the court orders.” Fed.

R. Civ. P. 26(a)(2)(D). Rule 26(e) requires a party to timely supplement or correct its

disclosure or response “if the party learns that in some material respect the disclosure or

response is incomplete or incorrect.” Fed. R. Civ. P. 26(e)(1)(A).

Under Rule 37, “[i]f a party fails to provide information or identify a witness as

required by Rule 26(a) or (e), the party is not allowed to use that information or witness to

supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially

justified or is harmless.” Fed. R. Civ. P 37(c)(1). As we have explained, the plain language

of Rule 37(c) sets a default rule of exclusion of undisclosed evidence unless there was good

cause for the failure to disclose or the nondisclosure was harmless. See S. States Rack &

Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 597 (4th Cir. 2003) (“Rule 37(c)(1) .

. . generally requires exclusion of evidence that a party seeks to offer but has failed to

disclose.”).

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(2)

In the portion of his declaration addressing chromium, de Haven stated, “As noted

in [his initial report], dated August 2024, there were concentrations of Chromium, a non-

petroleum related constituent that existed in the soil and groundwater of Plaintiff and

Defendants’ property. After review of the data, I have found that there are concentrations

of Chromium on the Defendant’s property. Specifically, two grab soil samples . . . from

Defendants’ property showed total chromium concentrations ranging from 57 to 69

mg/kg.” J.A. 1735-36.

The district court excluded that evidence after concluding that it amounted to new

expert opinion testimony that had not been disclosed by the deadline set in the scheduling

order for disclosure of expert opinions. The court explained:

Mr. de Haven testifies that chromium was present on BFJ’s property. He does not cite any factual evidence for this statement, mentioning only his earlier, timely expert disclosure. It therefore seems clear that this is opinion testimony.

Had Mr. de Haven discussed chromium in his earlier report, there would likely be no problem. But he did not, at least not as far as the Court can tell. His opinion about chromium was thus first proffered well after the October 11, 2024, deadline for disclosing expert opinions . . . .

J.A. 1819 (cleaned up). Harris challenges this analysis, arguing that his declaration was a

proper and timely supplement to his original opinions under Rule 26(e) that was “necessary

to ensure the accuracy and completeness of his expert opinion.” Brief of Appellant at 18.

We find the district court’s analysis a bit puzzling. While de Haven is of course an

expert, not everything an expert says is an opinion; experts also testify about the existing

facts and data that they relied on to reach their opinions. As we see it, de Haven’s

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statements about the presence of chromium are purely factual statements recounting the

results of environmental sampling. We are aware of no legal principle that would transform

an expert’s factual testimony into opinion testimony simply because the expert did not

adequately identify the document he reviewed to determine the facts.

To be sure, de Haven did not note the factual presence of chromium on BFJ’s

property in his initial report. While de Haven stated that sampling from the property had

been tested for chromium in 2006, he did not include the results of those tests in the report.

See J.A. 475. Nonetheless, de Haven’s initial report provided a fair amount of detail about

the 1996 release and the environmental assessments that followed, such as the UST

incident number assigned to the 1996 release, see J.A. 474, along with the dates and titles

of the environmental assessments and the names of the company that conducted the

assessments, see J.A. 474, 488. Given the amount of factual detail de Haven provided about

the 1996 incident, the failure to include the results of the chromium would seem, at least at

first blush, to be the kind of omission that could be corrected under Rule 26(e)(1)(A).

The district court, however, did not address Harris’s argument that de Haven’s

summary-judgment was a proper supplement under Rule 26(e)(1)(A). Instead, the court

simply concluded that his statements about the existence of chromium were new opinions

not timely disclosed. And while courts are appropriately skeptical of attempts to use Rule

26(e)(1)(A) to smuggle in new, untimely opinions, see, e.g., E.E.O.C. v. Freeman, 778 F.3d

463, 467 n.7 (4th Cir. 2015), we disagree with the district court’s characterization of de

Haven’s chromium testimony as opinion testimony. Because this case will be remanded

given the improper grant of summary judgment, we believe the prudent course of action is

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to vacate the district court’s exclusion of de Haven’s declaration to permit the district court

to reconsider the issue de novo, including the question of whether the chromium testimony

was proper as a supplementation or correction under Rule 26(e)(1)(A). 5

IV. State-law Claims

In its complaint, Harris also sought recovery under North Carolina law, asserting

claims for negligence, nuisance, and trespass, as well as a claim under North Carolina’s

Oil Pollution and Hazardous Substances Control Act, N.C. Gen. Stat. § 143-215.75, et seq.

The district court granted summary judgment in favor of BFJ on those claims, concluding

that Harris’s evidence failed to prove that BFJ caused the damage to its property. Although

de Haven stated in his summary-judgment declaration that BFJ’s property “is the most

likely source of the contamination as I have stated in my reports,” J.A. 1733, the court

found that evidence inadmissible because the declaration was made well after the window

5 North Carolina maintains publicly accessible databases providing information about leaks and discharges from underground storage tanks, including a map that is searchable by incident number and includes links to relevant documents, including environmental assessments of the affected property and actions taken by the State. See https://www.deq.nc.gov/about/divisions/waste-management/science-data-and-reports/gis- maps/underground-storage-tank-incidents-map [https://perma.cc/P4GY-ANM2]. Though it is not necessary to our decision, we note that the 2006 environmental assessment referred to in de Haven’s initial report appears to be the source of the information about chromium contained in his summary-judgment declaration, as that assessment shows the presence of chromium in the soil at the concentrations provided in the declaration. See Phase I Limited Site Assessment Report prepared by CBM Environmental Services at p.16-17 (June 15, 2006)https://edocs.deq.nc.gov/WasteManagement/DocView.aspx?id=147120&dbid=0&r epo=WasteManagement [https://perma.cc/48L7-X5FX]; Navigators Ins. Co. v. Under Armour, Inc., 165 F.4th 171, 180-81 n.9 (4th Cir. 2026) (explaining that appellate court “may take judicial notice of matters of public record”).

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for expert-testimony disclosure had closed and the declaration did not identify any portion

of de Haven’s (timely) initial report that contained a clear statement of causation.

Harris contends on appeal that de Haven’s testimony was sufficient to show that

BFJ was the source of the contamination on Harris’s property. We agree.

As the district court held, the state-law claims, unlike the CERCLA claim, require

the plaintiff to present proof of causation, see Ammons v. Wysong & Miles Co., 431 S.E.2d

524, 528 (N.C. Ct. App. 1993) (in case where plaintiff asserted the same state-law claims

as asserted by Harris, explaining that “causation is a common element necessary in each

claim asserted by the appellants”), and the causation opinions expressed by de Haven in

his initial report are not the most definitive. de Haven notes that groundwater flow “from

the Defendant’s to the Plaintiff’s property is limited,” but that “petroleum constituents

present at the Defendant’s property could have traveled” to Harris’s property. J.A. 486-87.

de Haven also identified BFJ’s property as “a potential source of groundwater impacts to

the Plaintiff’s property” given “the similarity in constituents and difference in magnitudes

of the groundwater impacts as well as the lack of significant soil contamination identified

on the Plaintiff’s property.” J.A. 487.

If those were the only statements, we might agree with the district court that they

were insufficient to establish BFJ as the source of the contamination. In his timely rebuttal

report, however, de Haven states that “[a]vailable evidence strongly points against”

Harris’s property being the source of the contamination, and that “it is our opinion that

transverse groundwater flow is likely to have occurred and resulted in the migration of

gasoline constituents from the Defendant’s property onto the Plaintiff’s property.” J.A.

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524. While de Haven’s language is not the most definitive, North Carolina law does not

appear to require any specific language to establish causation. And in our view, de Haven’s

ruling out of Harris’s property as the source and his statement that groundwater flow from

BFJ’s property “likely” resulted in the pollution on Harris’s property is enough—if just

barely—for the claims to survive summary judgment.

Accordingly, for the foregoing reasons, we vacate the grant of summary judgment

on the CERCLA and state law claims and remand for further proceedings consistent with

this opinion. 6

VACATED AND REMANDED

6 We find no abuse of discretion in the court’s denial of Harris’s motion to compel entry on BFJ’s property for the purpose of conducting additional environmental testing. If the court on remand decides to permit additional discovery, Harris is free to renew the request should it so desire.