A federal court recently ruled that the owner of a former auto shop in Banning, California is responsible for remediation costs stemming from an oil spill that was caused by a transient who broke into the building after it had been abandoned for years.
Until 2009, Douglas James rented the property and operated DJ's Smog Shop and Automotive at the site. At issue are the 55-gallon drums of waste and motor oil that he is believed to have left behind when he vacated the premises.
A transient named Steven Ryan was found to have dumped out the contents of the drums in July 2011. After the city responded to the spill, it filed a lawsuit against the property's owner, Mary Ann Dureau, and several other parties. Municipal officials sought to recover slightly more than $592,000 to cover remediation costs.
Case complicated by 'conflicting testimony'
Courthouse News Service's Environmental Law Review reported that U.S. District Judge Beverly Reid O'Connell was forced to sort through "conflicting testimony" from different parties to get to the bottom of the matter.
Dureau and Theresa Bluel, who had been hired to oversee cleanup of the property after the auto shop closed, both testified that there had been no barrels left behind in the facility. Bluel said she inspected the site at least once every 60 days and had seen evidence of squatters but no oil drums. However, the physical evidence contradicted their story, as did another witness.
Jacqueline Branom, a former employee of DJ's Smog Shop who was squatting in the abandoned building at the time of the spill, testified that James had left several barrels behind when the business moved out. She said that she saw two people breaking windows and knocking the barrels over on the day of the spill. After discounting testimony from Dureau and Bluel, Judge O'Connell ruled that Branom was a credible witness.
O'Connell also dismissed Dureau's claim that she was the owner of the property when the spill occurred. She said that she had transferred ownership to DBBF Enterprises prior to the spill, but a review of pertinent records revealed that she had actually transferred the title to the property a week after the spill.
Total liability under CERCLA: $592,665
Judge O'Connell noted that although the defendants claimed "that there were no barrels on the property after James' departure … immediately after the oil spill, photographs depict five barrels on the property. It is not reasonable to believe that Ryan or anyone else carried five 55-gallon drums, weighing 500 pounds each, onto the property only to spill them."
Furthermore, the court found that although Dureau was "largely an absentee landlord" it was clear that she knew of the environmental problems at the property in Banning because she admitted that she had received multiple warning letters from the city. O'Connell wrote that Dureau had "permitted the oil drums to remain on vacant, inadequately secured, property for a lengthy period of time. She also did not seek permits to store such waste, nor require such permits from her tenants."
Consequently, the court ruled that Dureau is liable for the remediation costs incurred by the city under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980.
Property owners who face potential environmental liabilities should draw a lesson from this incident: it pays to be proactive. The cost of performing a site assessment and hauling away a few barrels of waste would have been much lower than the nearly $600,000 that the city required to complete the necessary remediation work.
This case provides clear evidence that reaching out to environmental consultants for assistance is a far better option than waiting for an environmental liability to develop to the point that it demands substantial remediation.