United States v. PR Industrial Development Co.

18 F.4th 370

• Court: Court of Appeals for the First Circuit
• Decided: November 17, 2021
• Docket: 19-1874P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 19-1874

UNITED STATES OF AMERICA,

Plaintiff, Appellee,

v.

PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY,

Defendant, Third-Party Plaintiff, Appellant,

BECKMAN COULTER, INC.; SYSTEM ENGINEERING LABS, INC.; COULTER REAGENTS, INC; SOLAR MAT OF PUERTO RICO COMPANY, INC.; PUERTO RICO HOUSING DEPARTMENT; PREMIUM FRUIT COMPANY, INC.; PUERTO RICO BEVERAGE, INC.; EIG AGUA PURA DE PUERTO RICO, INC.; JUAN OROZCO LTD., INC.; CATPI, INC.; ORLE INTERNATIONAL CORPORATION; MUNICIPALITY OF MAUNABO; SUNOCO CARIBBEAN, INC.; INSURER NUMBERS ONE - TWELVE,

Third-Party Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

[Hon. Francisco A. Besosa, U.S. District Judge]

Before

Lynch and Selya, Circuit Judges, and McCafferty,* District Judge.

* Of the District of New Hampshire, sitting by designation. Juan Rafael González-Muñoz, with whom Juan J. Casillas-Ayala, Diana M. Batlle-Barasorda, and González Muñoz Law Offices, PSC were on brief, for appellant. Ellen J. Durkee, Attorney, Environment and Natural Resources Division, United States Department of Justice, with whom Jonathan D. Brightbill, Principal Deputy Assistant Attorney General, Eric Grant, Deputy Assistant Attorney General, Anna T. Katselas, Mark A. Gallagher, Richard S. Greene, and Catherine Adams Fiske, Attorneys, Environment and Natural Resources Division, United States Department of Justice, and James Doyle and Henry Guzmán, Attorneys, Office of Regional Counsel, Region 2, United States Environmental Protection Agency, were on brief, for appellee.

November 17, 2021

- 2 - LYNCH, Circuit Judge. In September 2015, the United

States brought a civil action under the Comprehensive

Environmental Response, Compensation, and Liability Act of 1980

("CERCLA"), 42 U.S.C. § 9601 et seq., against Puerto Rico

Industrial Development Company ("PRIDCO"), appellant here, as a

potentially responsible party ("PRP"). See Atl. Richfield Co. v.

Christian, 140 S. Ct. 1335, 1352 (2020). The United States sought

to recover response costs associated with the ongoing cleanup of

the Maunabo Area Groundwater Contamination Superfund Site (the

"Site"). PRIDCO owns property on the Site which contains elevated

levels of hazardous substances in the groundwater (the

"Property"). These very same hazardous substances were found

downgradient in a public drinking water well run by the Puerto

Rico Aqueduct and Sewer Authority ("PRASA").

The district court entered three separate summary

judgment opinions and orders against PRIDCO. It first found the

United States had established its prima facie case against PRIDCO

for liability under CERCLA. See United States v. P.R. Indus. Dev.

Co. ("PRIDCO I"), 287 F. Supp. 3d 133, 141 (D.P.R 2017). Next,

the district court concluded that PRIDCO had failed to meet its

burdens as to the innocent landowner defense set forth in 42 U.S.C.

§ 9607(b)(3) and the contiguous property owner exception provided

in 42 U.S.C. § 9607(q). See United States v. P.R. Indus. Dev. Co.

("PRIDCO II"), 368 F. Supp. 3d 326, 334–37 (D.P.R. 2019).

- 3 - Thereafter, the court held that PRIDCO was liable to the United

States for approximately $5.5 million in past response costs and

would be liable in future litigation for additional response costs

reasonably incurred by the United States. See United States v.

P.R. Indus. Dev. Co. ("PRIDCO III"), 386 F. Supp. 3d 162, 167

(D.P.R. 2019). Although the contribution phase remained, in July

2019, the district court entered what it termed the "Amended Final

Judgment" to permit the immediate appeal of these orders, citing

to Federal Rules of Civil Procedure 54(b) and 58.

PRIDCO appeals from that judgment. PRIDCO's primary

appellate argument is that the United States did not satisfy the

release prong of § 107(a) of CERCLA, 42 U.S.C. § 9607(a),

contending the United States could not succeed on that prong

because the record did not show the hazardous substances were

released from the surface of the Property.1 PRIDCO also argues

that the court erred in finding that PRIDCO had not met its burden

to establish the contiguous property owner exception provided in

42 U.S.C. § 9607(q).2 For these and other reasons, PRIDCO argues

that the entry of summary judgment and award of response costs

against it was error. We disagree, and affirm.

1 PRIDCO concedes that the other prongs have been met.

2 PRIDCO does not contest in this appeal the district court's determination that PRIDCO failed to meet its burden as to the innocent landowner defense. See 42 U.S.C. § 9607(b)(3). - 4 - I.

A. Legislative Background

Congress enacted CERCLA in 1980 following the discovery

of a large, uncontrolled hazardous waste site in Niagara Falls,

New York (Love Canal) and the associated pervasive health problems.

Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112,

120 & n.5 (2d Cir. 2010) (citing S. Rep. No. 96–848, at 8–10

(1980)). CERCLA's purpose is "to address the serious environmental

and health risks posed by industrial pollution." Atl. Richfield,

140 S. Ct. at 1345 (internal quotation marks omitted) (quoting

Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 559,

602 (2009)). It is designed "to promote the timely cleanup of

hazardous waste sites and to ensure that the costs of such cleanup

efforts [are] borne by those responsible for the contamination."

Id. (alteration in original) (quoting CTS Corp. v. Waldburger, 573

U.S. 1, 4 (2014)).

The statute has created a comprehensive mechanism for

the Environmental Protection Agency ("EPA"), through the

President, to investigate and respond to the release of hazardous

substances, contaminants, and pollutants into the environment.

See 42 U.S.C. § 9601 et seq.; Atl. Richfield, 140 S. Ct. at 1346

n.1. CERCLA instructs the EPA "to compile and annually revise a

prioritized list of contaminated sites for cleanup, commonly known

as Superfund sites." Atl. Richfield, 140 S. Ct. at 1346 (citing

- 5 - 42 U.S.C. § 9605). CERCLA empowers the EPA to itself undertake

the necessary response measures as to a Superfund site, 42 U.S.C.

§ 9604(a), as the EPA did here. The EPA is also authorized to sue

any PRP(s) to recover "all costs of removal or remedial action

incurred by the United States . . . not inconsistent with the

national contingency plan." Id. § 9607(a); see also id. §§ 9604–

06, 9615. The statute has enumerated four broad classes of PRPs

which "shall be liable" for these costs, including, as relevant

here, "the owner and operator of a vessel or a facility . . . from

which there is a release, or a threatened release which causes the

incurrence of response costs, of a hazardous substance." Id.

§ 9607(a).

CERCLA also governs the process by which the EPA selects

its response plan. 42 U.S.C. § 9605; 40 C.F.R. § 300.400(a). It

requires the agency, inter alia, to "establish an administrative

record upon which [it] shall base the selection of a response

action." 42 U.S.C. § 9613(k)(1). This record "shall be available

to the public" during the selection process and its development

shall involve the "participation of interested persons, including

potentially responsible parties." Id. § 9613(k). The record shall

also include the investigations and studies used by the EPA "to

assess site conditions and evaluate alternatives to the extent

necessary to select a remedy." 40 C.F.R. § 300.430(a)(2), (e)–

(f); see 42 U.S.C. § 9613(k)(2)(B).

- 6 - Before adopting a final remedy, the EPA is required to

solicit and consider public comments on the proposal. 42 U.S.C.

§ 9617(a); 40 C.F.R. § 300.430(f)(ii). The EPA is then required

to document its final remedy selection decision in a Record of

Decision ("ROD") "for inclusion in the administrative record." 40

C.F.R. § 300.430(f)(5). The selected remedy shall be "protective

of human health and the environment," "maintain protection over

time," and "minimize untreated waste." Id. § 300.430(a)(1)(i).

Congress also sets strictures for judicial review of the

EPA's actions. Judicial review of the response action(s) taken or

ordered by the EPA "shall be limited to the administrative record."

42 U.S.C. § 9613(j)(1). And the EPA's selection of a response

action shall be upheld unless, based on this record, it is deemed

"arbitrary and capricious or otherwise not in accordance with law."

Id. § 9613(j)(2); United States v. JG-24, Inc., 478 F.3d 28, 32

(1st Cir. 2007).

B. The Facts

PRIDCO is a Puerto Rican public corporation established

in 1942 through Act. No. 188 of May 11, 1942, P.R. Laws Ann. tit.

23, § 273, as amended, with a principal purpose of promoting

economic development in Puerto Rico through investment. PRIDCO

owns industrial property and constructs facilities for lease or

sale to qualified investors. PRIDCO has owned the Property, which

is the subject of this action, since at least 1968.

- 7 - The Property is located in the southeastern coastal area

of Puerto Rico in the Municipality of Maunabo. The Property

contains several buildings or "industrial structures," which have

been leased to numerous tenants for decades, as early as 1969.

The tenants have used these industrial structures, inter alia, to

manufacture modular circuit prints, biomedical and reactive

instruments, solar panels, laminated bedroom furniture, fruit

juice, guitars, and prefabricated piping for frame walls.

Adjacent to the southern boundary (and downgradient) of

the Property is Maunabo Well #1, one of the four groundwater supply

wells operated by PRASA in the area. These wells provide drinking

water to approximately 14,000 people living in and around Maunabo.

Maunabo Well #1 was installed in 1961, retired in 1974, and

returned to service in 2001. In the period between 2001 and 2004,

tests conducted by PRASA detected elevated levels of volatile

organic compounds ("VOCs") -- including tetrachloroethene ("PCE"),

trichloroethene ("TCE"), and cis-1,2-dichloroethene ("cis-1,2-

DCE") -- in the tap water of its customers from Well #1. Tests in

2002 revealed that the groundwater associated with the well

contained the same compounds, with the concentration of PCE

exceeding the federal maximum contaminant level. At all times

relevant to this case, the EPA has classified these compounds as

hazardous substances under CERCLA, and PRIDCO does not dispute the

classification. See 40 C.F.R. § 302.4.

- 8 - The EPA commenced a preliminary investigation of the

Site in 2005, and its test results confirmed those of PRASA. The

EPA began investigating PRIDCO, among others, as a potential source

of the contamination. The agency added the "Maunabo Area Ground

Water Contamination Superfund Site" to the National Priorities

List in 2006.3 71 Fed. Reg. 56399, 56403 (Sept. 27, 2006).

Based on extensive groundwater testing, the EPA

concluded that the Site contained three distinct plumes of

contaminated groundwater. The EPA identified one contaminated

plume as the "cis-1,2-DCE plume" (or the "PRIDCO Plume"), which is

present under the surface of PRIDCO's property and extends

downgradient towards Maunabo Well #1. The data shows that the

PRIDCO Plume contains high concentrations of TCE and cis-1,2-DCE,

a degradation product of TCE. The EPA reports show there are no

test results which have detected these two contaminants on the

Property in the soil directly above the PRIDCO Plume. Those same

reports state that "[t]he configuration of the cis-1,2-DCE plume

indicates that a release of Site-related contaminants . . .

occurred at or near the [PRIDCO] property." That is where cis-

1,2-DCE "exceed[ed] the groundwater screening criteria." The

parties agree the contamination is not naturally occurring.

3 The National Priorities List is a compilation of the most contaminated sites in the United States. See 40 C.F.R. § 300.425. - 9 - In 2012, the EPA completed its Final Remedial

Investigation/Feasibility Study Report, solicited and considered

public comments on a proposed response plan, and held a public

meeting on the matter. PRIDCO participated in the comment period

by contesting its designation as a PRP. PRIDCO otherwise did not

challenge the proposed response plan. The EPA rejected PRIDCO's

concerns because "site related contamination was detected in the

groundwater on the [PRIDCO] property and immediately downgradient

[thereof]," which follows the direction the groundwater flows.

After studying the environmental conditions at the Site,

evaluating various cleanup options, and considering the public

comments, the EPA issued the ROD in 2012. The EPA concluded that

the "site-related groundwater data contamination . . . does pose

a significant threat to human health or the environment; therefore,

remediation is necessary." The EPA conducted a comparative

analysis of alternative remedies, which it summarized in the ROD.

As to the remedy for the PRIDCO Plume, the EPA evaluated "monitored

natural attenuation" and "air sparging/soil vapor extrusion"

remedies, among others, based on the nine criteria for evaluation

set forth in 40 C.F.R. § 300.430(e)(9). The EPA describes

monitored natural attenuation as routine monitoring of

biodegradation in the plume used to assess the rate at which

contamination levels are decreasing naturally. The agency

characterizes the air sparging remedy as an active treatment which

- 10 - would accelerate the reduction of the PRIDCO Plume contaminant

concentrations to protect the area's drinking water supply.

The ROD selected the air sparging remedy for the PRIDCO

Plume, noting that the remedy would "serve to reduce the

concentration of contaminants in groundwater being drawn into the

Maunabo [Well] #1, providing protection of human health." The ROD

further reported that the air sparging remedy would "provide the

greatest permanent mass reduction of contamination within the cis-

1,2-DCE plume within the shortest period of time." It rejected

the remedy of monitored natural attenuation, explaining that,

"[i]f natural attenuation does not occur within a reasonable time

frame, there is the potential that the concentrations [of

contaminants would increase and] enter the Maunabo [Well] #1 in

the future, potentially impacting human health." The EPA also

noted that "the total volume of contaminated groundwater . . .

might increase if natural attenuation processes are unable to

contain the plume."

At the time the judgment appealed from was entered, the

air sparging system had not been constructed.4

4 The EPA has since completed construction of the air sparging system and is now operating the remedy.

- 11 - C. The Procedural History

In 2015, the United States initiated this action against

PRIDCO, seeking reimbursement for the response costs incurred by

the EPA in connection with the PRIDCO Plume. PRIDCO filed a third-

party complaint against other PRPs, namely, some of the tenants

that occupied and operated the Property during the relevant time

period and their insurers.5 On the United States' motion, the

trial proceedings were then trifurcated into liability, cost, and

contribution phases.

The United States moved for summary judgment as to

liability in July 2017 ("Phase I motion"). PRIDCO opposed the

motion and requested the deferral of its consideration under

Federal Rule of Civil Procedure 56(d) pending further expert

analysis of the contested source of the contamination found at the

Property. In a 43-page opinion and order entered in December 2017,

the district court granted in part and denied in part the Phase I

motion, and denied PRIDCO's request to defer the motion's

resolution. PRIDCO I, 287 F. Supp. 3d at 137. The court held

that the United States had met its burden, on the undisputed facts,

to establish PRIDCO's prima facie liability. Id. at 141, 145. It

also held that additional expert analysis on this issue was

unnecessary. Id. at 139. The court reasoned that "identifying

5 None of these parties have participated in this appeal. - 12 - the source of contamination is immaterial to the prima facie

liability analysis" when, as here, unnatural hazardous substances

are found on the defendant's property. Id. at 139; see id. at

144. Subject to a few narrow exceptions, the court explained,

CERCLA imposes strict liability on any property owner whose

groundwater is contaminated, regardless of fault. Id. at 144.

The court added that CERCLA places the burden on the property owner

to show a lack of causation as an affirmative defense or exception.

See id. at 147–49.

In the same opinion, the district court denied the United

States' Phase I motion as to PRIDCO's innocent landowner defense

and contiguous property owner exception. Id. at 147–49. The court

permitted the United States to renew this challenge to the defense

and exception after the completion of discovery. Id. at 148–49.

Following discovery, PRIDCO and the United States filed

cross-motions for summary judgment as to the innocent landowner

defense and contiguous property owner exception. PRIDCO II, 368

F. Supp. 3d at 329–30, 333. The United States also sought summary

judgment as to the amount of response costs owed by PRIDCO ("Phase

II motion") and moved to limit the scope of judicial review of the

remedy selected. Id. at 333. In another opinion and order, the

district court granted summary judgment in favor of the United

States for each defense and exception. Id. at 334–35. The court

concluded that PRIDCO fell short of its burden to establish as a

- 13 - triable issue that an unrelated third party was the sole cause of

the contamination. Id. at 335–36. The court denied without

prejudice the United States' motion to limit the scope of judicial

review and ordered the United States to provide further information

on the issue of costs. Id. at 343.

A few months later, the United States filed a

Supplemental Report clarifying its cost calculation. In a third

opinion and order, the district court granted the United States'

Phase II motion. PRIDCO III, 386 F. Supp. 3d at 165. The court

noted that the cost calculation for the motion represented only

past costs because the EPA had yet to commence the selected remedy

for the Site, but that PRIDCO would be liable for all future costs,

as well. Id. at 167. Reviewing the administrative record, the

court also concluded that the EPA's removal and remedial actions

were consistent with the national contingency plan. Id. at 169–

70.

On July 17, 2020, the district court entered an amended

final judgment, awarding the United States approximately $5.5

million in past response costs and declaring the United States'

entitlement to future response costs consistent with the national

contingency plan.6 PRIDCO appeals from that judgment. Phase III

6 The judgment was not docketed until July 23, 2019. - 14 - of the litigation -- that is, the contribution phase -- has been

stayed pending appeal.

II.

Orders granting summary judgment are reviewed de novo,

"drawing all reasonable inferences in favor of the non-moving

party." Pac. Indem. Co. v. Deming, 828 F.3d 19, 23 (1st Cir. 2016)

(internal citation omitted). Those inferences are drawn based "on

the record as it stands, not on litigants' visions of what the

facts might some day reveal." Finamore v. Miglionico, 15 F.4th

52, 58 (1st Cir. 2021) (quoting Maldonado-Denis v. Castillo-

Rodriguez, 23 F.3d 576, 581 (1st Cir. 1994)).

Summary judgment is appropriate when there is no

genuine dispute as to any material fact and the movant is entitled

to judgment as a matter of law. Arabian Support & Servs. Co. v.

Textron Sys. Corp., 943 F.3d 42, 47 (1st Cir. 2019). A genuine

issue exists if "a reasonable jury could resolve the point in favor

of the nonmoving party." Finamore, 15 F.4th at 58 (quoting

McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995)).

A fact is material if "it possesses the capacity, if determined as

the nonmovant wishes, to alter the outcome of the lawsuit under

the applicable legal tenets." Id. (quoting Roche v. John Hancock

Mut. Life Ins. Co., 81 F.3d 249, 253 (1st Cir. 1996)).

Review of questions concerning the interpretation of

CERCLA is de novo "with appropriate deference given to agency

- 15 - interpretations." JG-24, 478 F.3d at 32. A court considering

issues raised as to the EPA's actions "shall uphold the [EPA's]

decision in selecting the response action unless the objecting

party can demonstrate, on the administrative record, that the

decision was arbitrary and capricious or otherwise not in

accordance with law." 42 U.S.C. § 9613(j)(2).

A. Prima Facie Liability

PRIDCO first challenges the district court's entry of

summary judgment on prima facie liability in favor of the United

States. PRIDCO argues that there remain genuine issues regarding

the United States' prima facie case -- specifically whether there

was a "release" of hazardous substance from the Property -- thereby

precluding summary judgment. We disagree.

CERCLA states that: "the owner and operator of a . . .

facility . . . from which there is a release, or threatened release

which causes the incurrence of response costs, of a hazardous

substance, shall be liable . . . ." 42 U.S.C. § 9607(a); see

Dedham Water, 889 F.2d at 1151 n.4 (explaining that the phrase

"from which there is a release, or threatened release" modifies

all four subparagraphs in section 9607(a)). Subject only to narrow

affirmative defenses or exceptions set forth in 42 U.S.C.

§ 9607(b), (q), the statute imposes strict liability on the owner

of a facility, "without reference to whether [the owner] caused or

contributed to the threat of release." Id. at 1152–53; see also

- 16 - Acushnet Co. v. Mohasco Corp., 191 F.3d 69, 74 (1st Cir. 1999)

("By and large, a person who falls within one of the four

categories defined in § 9607(a) is exposed to CERCLA liability.");

Niagara Mohawk Power, 596 F.3d at 120 ("[P]roperty owners are

strictly liable for the hazardous materials on their property,

regardless of whether or not they deposited them there.").

To establish a prima facie case against an owner under

§ 107(a) of CERCLA, the United States has the burden to prove only

that the Property constitutes a "facility" as defined by 42 U.S.C.

§ 9601(9); PRIDCO owns the facility, id. §§ 9601(20), 9607(a);

"there was a release, or threatened release . . . of a hazardous

substance" from the facility, id. §§ 9601(14), (22), 9607(a); and,

as a result, the United States incurred response costs "not

inconsistent with the national contingency plan," id. §§ 9601(23)–

(25), 9607(a). Because PRIDCO owns the facility at issue, the

United States can establish PRIDCO's liability based on a "release"

of hazardous substances from that facility. See 42 U.S.C.

§ 9607(a). By contrast, CERCLA requires proof of a "disposal" to

hold the other three classes of PRPs (i.e., past owners and

operators, arrangers, and transporters) liable. See id.

CERCLA defines a "release" as "any spilling, leaking,

pumping, pouring, emitting, emptying, discharging, injecting,

escaping, leaching, dumping, or disposing into the environment."

42 U.S.C. § 9601(22) (emphasis added). A "disposal," which is

- 17 - defined more narrowly by the Solid Waste Disposal Act of 1965, is

"the discharge, deposit, injection, dumping, spilling, leaking, or

placing of any solid waste or hazardous waste into or on any land

or water . . ." 42 U.S.C. §§ 6903(3), 9601(29).

Unlike "disposal," courts have construed the definition

of "release" broadly, see Dedham Water, 889 F.2d at 1152, and to

include passive migration into the environment, see United States

v. CDMG Realty Co., 96 F.3d 706, 715 (3d Cir. 1996) (concluding

that Congress used the term "leaching" in its definition of

"release" but not of "disposal" to include passive migration only

for the former); ABB Indus. Sys., Inc. v. Prime Tech., Inc., 120

F.3d 351, 358 (2d Cir. 1997) (same). The term "environment"

includes "ground water" and "drinking water supply." 42 U.S.C.

§ 9601(8)(B).

As the owner of the Property, PRIDCO is clearly prima

facie liable due to the undisputed presence of hazardous substances

in its "ground water." 42 U.S.C. § 9601(8). On these facts,

evidence of soil contamination is not required. The undisputed

evidence is that the groundwater on PRIDCO's property (and within

its "facility," see PRIDCO I, 287 F. Supp. 3d at 142) is

contaminated with at least two hazardous substances: TCE and cis-

1,2-DCE. 40 C.F.R. § 302.4. This contaminated groundwater is

included within the statutory definition of "environment," 42

U.S.C. § 9601(8), in addition to constituting part of PRIDCO's

- 18 - "facility" in this case. Because groundwater flows and is not

static, the hazardous substances have migrated "from" the

groundwater in the facility, to the groundwater in the environment,

constituting a release.7

If that were not enough, the undisputed existence of a

contaminated groundwater plume under PRIDCO's property that has

migrated towards and been "intercept[ed]" by the Maunabo Well #1

drinking water supply clearly establishes the release element.

The undisputed evidence that the PRIDCO Plume extends to the

downgradient Maunabo Well #1 drinking water supply shows further

migration into the environment. Tests conducted by PRASA in 2002

discovered that the groundwater associated with the well contained

TCE and cis-1,2-DCE, the same hazardous substances detected in the

PRIDCO Plume. Additional tests detected these contaminants in the

tap water of PRASA's customers between 2001 and 2004.

PRIDCO's arguments to the contrary lack merit. PRIDCO

focuses on the United States' allegation that the release occurred

"at" PRIDCO's property, rather than "from" it as stated by the

statute. This argument is misplaced. It is the statute that

governs here, not the language used by the United States in its

7 Although PRIDCO asserts this argument is waived because it was not raised in the district court, "[w]e are at liberty to affirm a district court's judgment on any ground made manifest by the record, whether or not that particular ground was raised below." United States v. George, 886 F.3d 31, 39 (1st Cir. 2018). - 19 - pleadings. As just explained, the undisputed evidence satisfies

the "release" element as provided in the statute.

PRIDCO further argues that the use of the word "from" in

§ 107(a) of CERCLA requires the United States to identify the

source of the contamination to establish a prima facie release.

That is also incorrect.8 Nothing in the statute indicates the

United States has this burden of proof. See Dedham Water, 889

F.2d at 1152; cf. Cnty. of Maui v. Hawaii Wildlife Fund, 140 S.

Ct. 1462, 1473 (2020) (explaining, in the context of groundwater

pollution under the Clean Water Act, that "the specific meaning of

the word 'from' necessarily draws its meaning from context").

Section 107(a) sets forth the four elements the United States must

prove to establish its prima facie case. The United States has

8 Because the United States was not required to prove the source of contamination at the liability phase, the district court did not abuse its discretion by denying PRIDCO's request under Fed. R. Civ. P. 56(d) to defer the resolution of the United States' Phase I summary judgment motion until the source was identified. PRIDCO I, 287 F. Supp. 3d at 139; see Hicks v. Johnson, 755 F.3d 738, 743 (1st Cir. 2014) ("We reverse denials of Rule 56(d) motions only upon a clear showing of manifest injustice" where, at the least, the party opposing summary judgment proves likely "to garner useful evidence from supplemental discovery." (internal quotation marks and citations omitted)). Further, by the time Phase I summary judgment was entered, the case had been pending for more than two years and the investigation of the Site had been proceeding for nearly a decade. PRIDCO provides no reason why it did not, or could not, conduct its own investigation of the Site to determine the source of contamination.

- 20 - shown all four elements. Nothing in the provision's text requires

the United States also to identify the contaminant's source.

Further, nothing in § 107(a) of CERCLA limits liability

only to those who own facilities from which the contamination

originated. Rather, CERCLA holds strictly liable any owner of a

"facility" "from which there is a release, or threatened release

. . . ." 42 U.S.C. § 9607(a). The statute extends liability

wherever a hazardous substance both has "come to be located" on a

property, id. § 9601(9) (defining "facility"), and has threatened

to escape into the environment, see id. § 9601(22) (defining

"release"). As the Second Circuit has recognized, under CERCLA,

"property owners are strictly liable for the hazardous materials

on their property, regardless of whether or not they deposited

them there." Niagara Mohawk Power, 596 F.3d at 120.9

The legislative history further supports this position.

As we observed in Dedham Water Co. v. Cumberland Farms Dairy, Inc.,

9 PRIDCO's cite to the "Final Policy Toward Owners of Property Containing Contaminated Aquifers" memorandum issued by the EPA in 1995 does not help its claim. 60 Fed. Reg. 34790 (July 3, 1995). That policy has since largely been codified in the statute as the contiguous property owner exception. See 42 U.S.C. § 9607(q); S. Rep. No. 107–2, at 9–10 (2001) (stating that the statutory contiguous property exception "is similar to EPA guidance" of 1995 which "clarifies that EPA will not bring enforcement actions against owners of property that has been impacted by contaminated groundwater migrating from a neighboring facility"). We analyze this statutory exception infra, mentioning it here only to note that it does not relieve PRIDCO of prima facie liability. - 21 - that history shows that the original CERCLA House bill required a

causal connection between a PRP and a release, but that "this

causation language was deleted from the final bill that was

passed." 889 F.2d at 1152–53 (citing H.R. Rep. No. 96–1016, at 33

(1980), reprinted in 1980 U.S.C.C.A.N. 6119, 6136–37; and H.R.

7020, 96th Cong. 2d Sess. § 3071(a)(1)(C) (1980), 126 Cong. Rec.

26, 779, reprinted in 2 A Legislative History of CERCLA, at 39

(1983)); see 42 U.S.C. § 9607(a). "[T]he statute that was passed

imposed liability on classes of persons, i.e. owners, former

owners, generators, or transporters, without reference to whether

they caused or contributed to the threat of release." Dedham

Water, 889 F.2d at 1153 (internal citation omitted). Later

legislative history also notes that, "[u]nder CERCLA, [landowners]

can be held liable for the entire cost of cleanup, even if . . .

innocent," in the sense that they are not the source of

contamination. S. Rep. No. 107-2, at 2 (2001). This history

supports the district court's conclusion that "identifying the

source of contamination is immaterial to the prima facie liability

analysis." PRIDCO I, 287 F. Supp. 3d at 139.

B. Contiguous Property Owner Exception

There was no error in the district court's holding that,

on the undisputed facts, PRIDCO had not met its burden to show the

contiguous property owner exception. PRIDCO bore the burden to

establish the exception "by a preponderance of the evidence." 42

- 22 - U.S.C. § 9607(q)(1)(B); Atl. Richfield, 140 S. Ct. at 1356. This

burden requires PRIDCO to satisfy eight statutory requirements, of

which we highlight the following:

(A) [The person] owns real property that is contiguous to or otherwise similarly situated with respect to, and that is or may be contaminated by a release or threatened release of hazardous substance from, real property that is not owned by that person . . . (i) the person did not cause, contribute, or consent to the release or threatened release; [and] (ii) the person is not-- (I) potentially liable, or affiliated with any other person that is potentially liable, for response costs at a facility through any direct or indirect familial relationship or any contractual, corporate, or financial relationship (other than contractual, corporate, or financial relationship that is created by a contract for the sale of goods or services); or (II) the result of a reorganization of a business entity that was potentially liable.10

10 The other criteria are as follows: (iii) the person takes reasonable steps to-- (I) stop any continuing release; (II) prevent any threatened future release; and (III) prevent or limit human, environmental, or natural resource exposure to any hazardous substance released on or from property owned by that person; (iv) the person provides full cooperation, assistance, and access to persons that are authorized to conduct response actions or natural resource restoration at the vessel or facility from which there has been a release or threatened release (including the cooperation and access necessary for the installation, integrity, operation, and maintenance of any complete or partial - 23 - § 9607(q)(1)(A). As the United States argues, PRIDCO is required

to establish each requirement. PRIDCO has not done so.

PRIDCO has failed to establish a genuine dispute as to

whether it is affiliated with whoever caused the contamination.

PRIDCO's expert witness, Eng. Raúl Colón Vicenty, opines that,

given the absence of detected contaminants in the soil at the

Property, it is not "likely" that PRIDCO caused or contributed to

response action or natural resource restoration at the vessel or facility); (v) the person -- (I) is in compliance with any land use restrictions established or relied on in connection with the response action at the facility; and (II) does not impede the effectiveness or integrity of any institutional control employed in connection with a response action; (vi) the person is in compliance with any request for information or administrative subpoena issued by the President under this chapter; (vii) the person provides all legally required notices with respect to the discovery or release of any hazardous substances at the facility; and (viii) at the time at which the person acquired the property, the person--(I) conducted all appropriate inquiry within the meaning of section 9601(35)(B) of this title with respect to the property; and (II) did not know or have reason to know that the property was or could be contaminated by a release or threatened release of one or more hazardous substances from other real property not owned or operated by the person. 42 U.S.C. § 9607(q)(1)(A). The statute also specifies certain actions that a contiguous property owner need not take where the hazardous substance migrates solely through the groundwater. See id. § 9607(q)(1)(D).

- 24 - the contamination found in the groundwater. We assume, without

deciding, that this expert opinion creates a genuine dispute of

material fact as to whether PRIDCO "cause[d]" or "contribute[d]"

to the release. Id. § 9607(q)(1)(A)(ii).

Regardless, PRIDCO's assertion of the contiguous

property exception fails for the separate reason that it has not

shown an ability to prove it is unaffiliated with any other PRP,

as required by the second requirement, 42 U.S.C.

§ 9607(q)(1)(A)(ii). PRIDCO contends that it does not own the

neighboring property from which PRIDCO asserts the contamination

originated. But PRIDCO has failed to identify the actual cause of

the release. PRIDCO has not identified what person or entity

disposed of the hazardous substances on that property. Instead,

PRIDCO's expert merely opines that it was "possible" that dumping

occurred "at or nearby" the neighboring property. When asked who

dumped the hazardous substances, the expert replied: "Who knows.

I don't know." We cannot say that PRIDCO is unaffiliated with the

responsible party without knowing with whom or what PRIDCO is to

be deemed unaffiliated. Because PRIDCO bears the burden to

disprove its association with the responsible party by a

preponderance of the evidence, id. § 9607(q)(1)(B), and has failed

to create a triable issue on the matter, the district court's

conclusion was correct.

- 25 - C. The Selected Remedy Was Not Arbitrary and Capricious

PRIDCO finally contends that the district court abused

its discretion by "de facto" granting the United States' motion to

limit the scope of review by failing to consider at Phase II

materials falling outside of the EPA's administrative record.

PRIDCO argues that, due to that "de facto" grant, it was prevented

from challenging the EPA's selection of the air sparging remedy

which PRIDCO asserts was arbitrary and capricious. PRIDCO again

misrepresents the record. There was no claimed "de facto" grant.

Under CERCLA, a responsible party is liable for "all

costs of removal or remedial action incurred by the United States

. . . not inconsistent with the national contingency plan." 42

U.S.C. § 9607(a)(4)(A). Consistency of the EPA's response actions

with the national contingency plan is presumed. City of Bangor v.

Citizens Commc'ns Co., 532 F.3d 70, 91 (1st Cir. 2008).

"[J]udicial review of any issues concerning the adequacy of any

response action taken or ordered by the [EPA] shall be limited to

the administrative record." 42 U.S.C. § 9613(j)(1).

i. The Court's Review of the Remedy Selection Was Properly Limited to the Administrative Record

PRIDCO first argues the district court abused its

discretion at Phase II by "de facto" granting the United States'

motion to limit the scope of review of the remedy selection. The

United States specifically sought to exclude the opinion of

- 26 - PRIDCO's expert, Dr. Konrad J. Banaszak, as to the air sparging

remedy; the opinion was submitted six years after the remedy was

selected and the ROD was completed. On March 25, 2019, the

district court denied the United States' motion without prejudice.

See PRIDCO II, 368 F. Supp. 3d at 343. The United States never

renewed the motion and the district court did not thereafter

expressly grant it. PRIDCO argues the motion was "de facto"

granted in the court's May 2019 summary judgment opinion and order

because, in that opinion, the court did not consider materials

falling outside the EPA's administrative record. See PRIDCO III,

386 F. Supp. 3d at 169–70. Relevant here, the district court

stated that, generally, judicial review of the agency's response

action "is limited to the administrative record." Id. (citing 42

U.S.C. § 9613(j)).

PRIDCO's argument is based on the contention that the

court was obligated on these facts to go outside that record to

review the selected removal and remedial actions taken by the EPA.

Ordinarily, courts do not do so and this case presented no occasion

to diverge from that standard practice. 42 U.S.C. § 9613(j)(1);

id. § 9613(j)(2) ("In considering objections raised in any judicial

action under this chapter, the court shall uphold the [EPA's]

decision in selecting the response action unless the objecting

party can demonstrate, on the administrative record, that the

decision was arbitrary and capricious." (emphasis added)); see

- 27 - also Liston v. Unum Corp. Officer Severance Plan, 330 F.3d 19, 23

(1st Cir. 2003) (precluding supplementation of an administrative

record, reasoning "how could an administrator act unreasonably by

ignoring information never presented to it?"). The EPA in this

case had compiled an administrative record that was made available

to the public and contained the agency's studies, investigations,

review of public comments, and comparative analysis of alternative

response actions.

PRIDCO challenges this conclusion, arguing that this

case warrants the review of extra-record materials as to remedy

selection because post-ROD studies were considered at the

liability phase. This is incorrect. Admissibility at the

liability stage is governed by the Federal Rules of Evidence.

Challenges to the EPA's selected response action(s) are subject to

§ 113(j) of CERCLA. Subject to narrow exceptions not presented

here, § 113(j)(1) limits judicial review of the EPA's response

action(s) to the administrative record. See 42 U.S.C.

§ 9613(j)(1); JG-24, 478 F.3d at 34 ("Normally, we do not allow

supplementation of the administrative record unless the proponent

points to specific evidence that the agency acted in bad faith.");

Olsen v. United States, 414 F.3d 144, 155–56 (1st Cir. 2005)

(stating a limited exception for "failure to explain

administrative action as to frustrate effective judicial review."

(internal quotation marks and citation omitted)). The district

- 28 - court did not abuse its discretion by adhering to the express

limits of review set forth in § 113(j). See JG-24, 478 F.3d at

33–34 ("Under CERCLA, judicial review normally is limited to the

administrative record as it existed at the time of the challenged

agency action.").

ii. The EPA Adequately Considered Alternative Remedies

PRIDCO argues the EPA's selection of the air sparging

remedy was arbitrary and capricious because there was inadequate

consideration of alternative remedies in the ROD. PRIDCO prefers

the less expensive remedy of monitored natural attenuation.

PRIDCO again misrepresents the record. The ROD contains

a six-page discussion of the EPA's various alternatives. That

discussion includes a careful comparative analysis between the air

sparging remedy and monitored natural attenuation, among others,

to determine which remedy would best "protect human health and the

environment." See 40 C.F.R. § 300.430(a)(1)(i) ("The national

goal of the remedy selection process is to select remedies that

are protective of human health and the environment, that maintain

protection over time, and that minimize untreated waste."). The

EPA acknowledged that concentrations of the contaminants were, as

PRIDCO offers, decreasing naturally, and that monitored natural

attenuation would be cheaper to implement. The EPA nonetheless

rejected monitored natural attenuation as the sole remedy for the

- 29 - PRIDCO Plume because it found the process insufficiently

protective of human health. The EPA determined that the process

was too slow to protect drinking water supplies -- namely, Maunabo

Well #1 -- within a reasonable timeframe. The EPA also warned

that "the total volume of contaminated groundwater . . . might

increase if natural attenuation processes are unable to contain

the plume."

Based on these findings, the EPA reasonably selected the

active air sparging remedy instead to "accelerat[e] what nature

would do," "promote the degradation in less time," and "remove the

contaminants . . . permanently." This decision was neither

arbitrary nor capricious. See United States v. Ne. Pharm. & Chem.

Co., 810 F.2d 726, 748 (8th Cir. 1986) ("Because determining the

appropriate removal and remedial action involves specialized

knowledge and expertise, the choice of a particular cleanup method

is a matter within the discretion of the EPA.").

III.

The district court's holdings that the United States had

made out its prima facie case against PRIDCO for liability; that

PRIDCO had failed to meet its burden as to the contiguous property

owner exception; and that the United States was entitled to recover

$5,491,278.78 in response costs through February 28, 2018, plus

post-judgment interest, are affirmed. Costs are awarded to the

United States.

- 30 -