|Seth H. Handy is an associate with Edwards & Angell, LLP, where he focuses on environmental law. He represented the plaintiff in the case of Newly Weds Foods, Inc. v. Westvaco Corp., discussed in this article.
The case of Newly Weds Foods, Inc. v. Westvaco Corp.,1
decided in 2002, has raised the stakes in environmental due diligence for Massachusetts real estate acquisitions. Proving a case for recovery of cleanup costs for a seller's oil contamination under the Oil and Hazardous Material Release Prevention Act,2
has become much more challenging. Despite the legislature's intent to hold polluters financially accountable for their pollution, in the case of oil contamination, the courts have made it extremely difficult for plaintiffs to be made whole. In Newly Weds
, the Superior Court concluded that even in a situation where a defendant had been the sole owner and operator of an underground storage tank at the time it leaked, plaintiff was not entitled to response costs absent proof that defendant had breached a duty that caused the contamination. This reading of a plain "causation" standard to require proof of a breach of duty undermines the remedial purpose of Chapter 21E.
Section one of this article briefly discusses Chapter 21E and its treatment of oil contamination. Section two illustrates the courts' interpretation of the "causation" standard in cost recovery cases for oil contamination. Section three contrasts that construction with the common construction of "causation." Section four explores the application of res ipsa loquitur in historic oil contamination cases. The conclusion discusses the policy implications of this legal analysis and advocates a return to a traditional reading of "causation" or a statutory amendment for clarification.
I. Chapter 21E and Oil Contamination
Chapter 21E is the state counterpart of the federal Comprehensive Environmental Response Compensation and Liability Act (CERCLA).3 Both statutes are designed to prompt the cleanup of contaminated properties by requiring remediation and establishing a wide net of liability (retroactive and strict with defenses and exceptions) for the costs of cleanup.4 In cases between private parties (where the government does not participate in the remediation), as a general rule, property owners are principally responsible for responding to contamination and can then seek the participation (either actual or financial) of other "responsible parties."5 If the other responsible parties do not agree to participate in or pay for the cleanup, the party initiating the cleanup can sue for full cost recovery (if the plaintiff is "innocent") or for contribution (if liability is shared between the parties).6
CERCLA excludes petroleum from the definition of "hazardous substance."7 In response to this "petroleum exclusion" in CERCLA, many states, including Massachusetts, enacted legislation requiring remediation of oil contamination and establishing liability for those response costs. Yet, even in Chapter 21E, only two of five categories of statutory liability apply to oil contamination.8 Chapter 21E section 5(a) provides, in part, as follows:
(1) The owner or operator of a vessel or a site from or at which there is or has been a release or threat of release of oil or hazardous material; (2) any person who at the time of storage or disposal of any hazardous material owned or operated any site at or upon which such hazardous material was stored or disposed of and from which there is or has been a release or threat of release of hazardous material; (3) any person who by contract, agreement, or otherwise, directly or indirectly, arranged for the transport, disposal, storage or treatment of hazardous material to or in a site or vessel from or at which there is or has been a release or threat of release of hazardous material; (4) any person who, directly, or indirectly, transported any hazardous material to transport, disposal, storage or treatment vessels or sites from or at which there is or has been a release or threat of release of such material; and (5) any person who otherwise caused or is legally responsible for a release or threat of release of oil or hazardous material from a vessel or site, shall be liable; without regard for fault, É to any person for damage to his real or personal property incurred or suffered as a result of such release or threat of release. . . .9
Section 5(a)(1) makes current owners and operators of property liable for any release of oil contamination and section 5(a)(5) makes other persons (including, most notably past owners or operators) liable if they "caused" or are "legally responsible" for oil contamination.10 The word "oil" was omitted from the other three sections that establish liability of: 1) past owners and operators, 2) those that contract or arrange for the transport of hazardous materials and 3) those that transport hazardous materials to a contaminated property.11 As a result, the courts have struggled to decipher the legislature's intent in addressing oil contamination remnant from prior owners and operators. Chapter 21E clearly excludes oil contamination from the strict liability provisions of section 5(a)(2), but at section 5(a)(5) establishes catch-all liability for those that "cause[d] or [are] legally responsible" for such oil contamination. The courts that have confronted the question of what it means for a prior owner or operator to "cause" or be "legally responsible" for oil contamination have done so in this statutory context.
II. The Courts on Section 5(a)(5) 'Causation'
The starting point for commentary on the Massachusetts decisions construing Massachusetts General Laws chapter 21E, section 5(a)(5) are two rulings by the Supreme Judicial Court made during its 1994-95 term: Griffith v. New England Telephone & Telegraph Company12 and Marenghi v. Mobil Oil Corp.13 A recent Superior Court decision also illustrates that Supreme Judicial Court decisions have generated confusion and produced results inconsistent with the remedial purpose of Chapter 21E.
The 1995 Griffith case is the first Supreme Judicial Court decision on this question. In Griffith, the defendant, New England Telephone, had leased property from the Wyman Two Trust from 1958 until 1984 on which the phone company operated a garage and testing facility.14 In 1958, the Wyman Two Trust installed three underground storage tanks.15 New England Telephone was the exclusive user of those underground storage tanks and purchased all of the gasoline and fuel oil stored in the tanks.16 In 1978, plaintiffs bought the property from the Wyman Two Trust and assumed the lease with New England Telephone.17 Six years later, after the phone company yielded the property, plaintiffs demolished the phone company's facility and removed the three underground storage tanks.18 At that time, none of the tanks showed any signs of leaking.19 The property was then fenced off and left vacant for two years.20 In 1986, the plaintiffs commenced construction of an office building and found petroleum contamination near the location of the former underground storage tanks.21 Plaintiffs were directed by the Massachusetts Department of Environmental Protection ("DEP") to remediate and subsequently brought suit against New England Telephone seeking cost recovery.22
After a bench trial, the trial court found that the oil contamination had occurred between 1958 and 1984 and that the source of the contamination was petroleum that New England Telephone had brought onto the property.23 The court concluded that the phone company was liable under Massachusetts General Laws chapter 21E, section 5(a)(1) as the operator of a site from which there had been a release of oil or hazardous material, and entered judgment for the plaintiffs.24 New England Telephone appealed on the grounds that it was not a current owner or operator of the property liable under section 5(a)(1) and that it had been released from liability pursuant to the terms of a letter agreement executed by plaintiffs at the time that New England Telephone resolved to leave the property.25 The Appeals Court affirmed the trial court's judgment.26
On further review, the Supreme Judicial Court held that New England Telephone was not a person liable under section 5(a)(1) because that section applies only to current owners and operators. The court then turned to the causation question presented in section 5(a)(5),27 noting that oil was excluded from section 5(a)(2) and, therefore, that past owners and operators of sites contaminated by oil cannot be held strictly liable for oil contamination occurring during the period of their ownership or operation.28 However, the court added that section 5(a)(5) was included to establish liability for past owners of oil-contaminated sites when they have "caused" a release of oil from the site.29 Without providing any additional reasoning, the court concluded that the trial judge's findings that the contamination had occurred between 1958 and 1984 from petroleum that New England Telephone had brought onto the property did not establish that New England Telephone "caused" the contamination and remanded the case to the Superior Court for further findings on that question.30 On remand, the Superior Court took no new evidence and entered judgment for the plaintiffs based on supplemental argument presented in briefs.31 Once again, New England Telephone appealed.
On New England Telephone's second appeal, plaintiffs argued that (i) New England Telephone had both caused and was "legally responsible" for the oil contamination under section 5(a)(5),32 and (ii) under the lease, New England Telephone was responsible for maintaining the tanks and a breach of this duty had caused the contamination.33 The Supreme Judicial Court did not agree that the lease imposed any express duties on the defendant and, therefore, rejected the theory of "legal responsibility." The court then addressed the question of whether New England Telephone had "caused" the contamination.34
Restating the conclusion reached in its prior opinion (that ownership, operation and storage of oil was insufficient to establish causation), the Supreme Judicial Court noted that there was no evidence of either how or when the contamination had occurred.35 The court then stated: "Absent some duty on the part of defendant to prevent contamination of the site from the tanks, the judge's finding [that the underground tanks caused the site contamination] adds nothing to the case that was previously before us in Griffith I."36 The court provided no citation or further explanation for its conclusion that plaintiffs needed to produce evidence of a duty in order to establish causation. The court expounded that even if the tanks had caused the contamination, it was unclear whether the contamination occurred during the term of New England Telephone's lease.37 The evidence that contamination had not been found until two years after New England Telephone's tenancy and that the tanks showed no signs of a release when they were removed suggested that New England Telephone might not have caused the contamination when it leased the property.38 Finally, in a footnote, the court refuted plaintiffs' reliance on res ipsa loquitur absent definitive evidence that New England Telephone was in exclusive control of the tanks at the time that the release occurred.39 In the end, the Supreme Judicial Court reversed the judgment and remanded for entry of judgment for New England Telephone.40
It is not easy to determine what led the court to reverse on the causation issue. In one sentence (unsupported by citation or discussion), the court appears to require proof of a breach of duty to support a case for causation. However, the court's conclusion on causation concentrates on the lack of certainty that the contamination had occurred during the term of New England Telephone's tenancy. The footnote addressing plaintiff's res ipsa loquitur argument indicates that the court may have reached a different result if plaintiffs had been able to show that the release occurred while New England Telephone had exclusive control of the underground storage tanks. Given this reasoning, the sentence calling for proof of a duty appears to be dictum. However, that dictum has shaped subsequent judicial decision-making on this causation standard.
Like the Griffith case, Marenghi twice reached the Supreme Judicial Court, but did so in a different procedural posture, because plaintiffs had lost their section 5(a)(5) case from the start. In Marenghi, the Barton family had owned and operated a gas station from 1935 until 1982.41 Starting in 1955, the Bartons bought their fuel from Mobil Oil Corp. and stored it in underground storage tanks installed by, leased from and maintained by Mobil under the terms of a written agreement.42 In 1977, the Bartons determined the fuel level in one 2000-gallon underground storage tank was falling and called Mobil in to investigate.43 Mobil responded immediately by hiring a contractor to excavate the underground storage tank, plug the hole and reline and reinstall the tank.44 Neither Mobil nor its contractor made any attempt to determine whether the soil surrounding the tank had been contaminated.45
The Bartons sold the gas station property to plaintiffs in 1982.46 At the time of the conveyance, Mobil transferred ownership of the underground storage tanks to the Bartons, who then transferred them to the plaintiffs, informing plaintiffs that the tanks had been relined in 1977.47 In 1988, plaintiffs replaced the underground storage tanks and found oil contamination around the 2000-gallon tank,48 reported the contamination to DEP, removed the contaminated soil and then sued Mobil, claiming that (i) Mobil caused the release through its negligent installation and maintenance of the tank and (ii) Mobil was "legally responsible" for the contamination because it had owned the underground storage tanks at the time of the release.49 The trial judge granted Mobil's motion for summary judgment, holding plaintiffs had no reasonable expectation of proving Mobil had negligently installed the underground storage tank or had a contractual duty to perform preventative maintenance or that Mobil's contractual duty to repair the underground storage tank obliged it to repair property contaminated as a result of the leak.50 Plaintiffs appealed, and the Supreme Judicial Court elected to take the case.51
Here, it is helpful to note a 1990 United States District Court decision that provides a contemporaneous exchange between jurisdictions on the section 5(a)(5) causation issue. In Wellesley Hills Realty Trust v. Mobil Oil Corp., the federal District Court questioned the Superior Court judge's reasoning on causation in Marenghi and anticipated that the Supreme Judicial Court would reach a different conclusion.52 The District Court agreed that evidence of something more than ownership is required to prove causation under section 5(a)(5).53 However, the District Court concluded that the Marenghi plaintiffs had shown much more than ownership and had met their burden of proof on causation by showing that Mobil stored oil in an underground storage tank, that the tank leaked and that Mobil did not remediate the resulting contamination.54 Therefore, the United States District Court gave no weight to the Superior Court's decision and ruled that its own plaintiff - who had proven that Mobil owned a piece of property for 60 years, operated a gas station on the property and stored oil on the property and that the oil releases occurred during Mobil's ownership/operation - clearly stated a claim under section 5(a)(5).55 By the time the Supreme Judicial Court accepted Marenghi, the federal District Court's refutation of the Superior Court's reasoning was before them.56
On first review in Marenghi, the Supreme Judicial Court cited Griffith I and Wellesley Hills for the proposition that site ownership is not enough to prove liability under section 5(a)(5).57 However, the court disregarded the Wellesley Hills ruling on causation. Rather than resolving this issue, the Supreme Judicial Court admonished the lower court and the parties for failing to focus on causation, vacated summary judgment and remanded the case for further proceedings on the same issue raised in Griffith I - whether a release of oil that a defendant brought onto a site and stored in tanks is sufficient to establish causation.58
After briefs and oral arguments, the Superior Court once again granted summary judgment for Mobil.59 The trial judge conceded causation is "the most metaphysical of all the elements of negligence" and tried to make sense of that standard by referring to the Wellesley Hills and Griffith I holdings on this issue.60 Questioning whether Griffith I was still good law after Wellesley Hills, the judge commented that Mobil did not occupy the property, use the underground storage tanks or store or own the oil in Marenghi, facts that, in the court's opinion, provided a stronger defense than was available to New England Telephone in Griffith.61 The trial judge refined the definition of causation by noting that intentional acts were certainly within its ambit and that, "since 'causation' and 'duty' are interrelated . . . breaches of common law duties, whether contract or tort, could give rise to liability under §5(a)(5). . . ."62 Based on this elaboration of the legal standard, the trial judge concluded that there was no specific evidence Mobil could have or should have done anything to prevent the leak or that it was "unreasonable" to use a tank for 22 years.63
On the second appeal, the Supreme Judicial Court gave the plaintiff no reprieve.64 On plaintiff's argument that Mobil was "legally responsible" for the oil contamination, the court restricted its focus to a series of equipment loan agreements that lacked any provision requiring Mobil to engage in preventative maintenance on the underground storage tanks.65 On causation, the court made no mention of Wellesley Hills and followed the trial judge's lead in holding the plaintiff lacked evidence that the defendant could have or should have done anything to prevent the leak or was unreasonable in leaving the tank in service for more than 22 years.66 "What is lacking is any evidence, for example, that the tank was improperly installed, or that it was left in the ground for an unreasonable period of time."67
The Marenghi plaintiffs set out to prove Mobil breached a duty from the start - based either in common law negligence or arising out of a contract. Their theory of the case did not focus strictly on the question of causation.68 Based on one line of dictum in Griffith II and a plaintiff's negligence-based theory of liability in Marenghi, the Supreme Judicial Court interpreted Massachusetts General Laws chapter 21E section 5(a)(5) in a way that would frustrate the efforts of subsequent plaintiffs to be reimbursed for oil contamination they did not "cause."
c) Newly Weds Foods
Newly Weds Foods, Inc. v. Westvaco Corp. provided good facts to test the extent to which the causation standard had been transformed into a requirement to prove negligence.69 In that case, Newly Weds Foods purchased property from Westvaco in 1981, knowing there was one underground tank on the property used to store heating oil. Westvaco had been the sole prior owner and operator of the property since construction of the improvements in 1947. Newly Weds Foods did not find oil contamination until 1995 when it removed the one known underground storage tank and discovered an adjacent, abandoned, 20,000-gallon underground fuel oil storage tank.70 A 3-foot wide strip of metal had been cut out of the top of the abandoned tank and it had been filled with sand.71 Westvaco did not disclose the abandoned tank or surrounding contamination when it sold the property to Newly Weds Foods. And Newly Weds Foods had never known about or operated the tank.72 Newly Weds Foods had used the underground storage tank next to the abandoned tank to store fuel oil, and when that tank was removed, it contained no holes and was in good condition. Newly Weds Foods sent Westvaco a letter requesting contribution and, receiving no commitment, sued for response costs, claiming the defendant caused and was legally responsible for the contamination.73
At trial before a jury, plaintiff produced metal cutouts of two holes in the abandoned tank, two cans (Pepsi and Budweiser pony) that were recovered from the abandoned tank and dated (by an expert) to just before the sale of the property, and a witness who was able to describe (based on second-hand information received from a former Westvaco employee since deceased) defendant's discovery of the abandoned underground storage tank "all messy with oil" in 1979.74 Plaintiff also produced factual and expert testimony that the abandoned underground storage tank had been left in the ground for an unreasonable length of time, given the typical life expectancy of a steel underground storage tank.75
The judge instructed the jury on causation, in part, as follows:
If the plaintiff establishes, as it alleges here, by a fair preponderance of the credible evidence, that the defendant acted unreasonably in some manner with the [underground storage tank], by for instance leaving the tank in the ground for an unreasonable length of time, or by failing to detect a leak by reasonably monitoring or maintaining the tank, or by leaving the tank in the ground when it knew or should have known that it was releasing or was likely to release oil or if defendant knew or should have known that oil was released into the ground from the tank and unreasonably failed to remove the contaminated soil, then that would be sufficient conduct to establish liability provided that plaintiff has also shown that that conduct caused the contamination which required remediation.76
Based on the evidence, the jury held Westvaco liable for 75 percent of the response costs pursuant to Massachusetts General Laws chapter 21E section 5(a)(5) while allocating 25 percent of the liability to Newly Weds Foods.77 Defendant had presented evidence that Newly Weds Foods' failure to quickly respond to the disputed contamination had "contributed to" the contamination and that a small quantity of lighter fuel oil detected on the property may have been attributable to plaintiff.
Pursuant to section 4A, a Chapter 21E plaintiff must send a written request for contribution and await a written response before filing suit.78 Subsequently, a successful litigant is entitled to recover attorney's fees if it can prove the other party failed without reasonable basis to perform or participate in the cleanup on an equitable basis or pay its equitable share of the cost of such response action where its liability was "reasonably clear."79 Therefore, to decide plaintiff's fee petition in Newly Weds, the trial court had to determine whether defendant's liability was "reasonably clear" when the parties exchanged Section 4A letters and negotiated for resolution of the matter long before the trial.80
At the time of the initial negotiation, Newly Weds Foods had uncovered the abandoned underground storage tank that was backfilled with sand and soil. Soil and groundwater sampling had shown surrounding oil contamination. It also was known that Westvaco was the sole prior owner of the property and that Newly Weds Foods never owned or operated the abandoned underground storage tank. For a brief time, Newly Weds Foods had used an adjacent tank for storage of fuel oil, but when removed in 1995, that tank was in fine condition. During the Section 4A process, Westvaco did not know of the holes that were ultimately found in the bottom of the abandoned underground storage tank or the cans in the tank dated to just before the sale of the property or the witness who testified about defendant's employees viewing the abandoned tank "all messy with oil" in 1979. There also was some question regarding the type of oil contamination found at the site, the large majority of which was heavy number six fuel oil. Westvaco responded to the Section 4A letter by denying liability, attributing the fuel oil contamination to Newly Weds Foods and citing a lack of evidence that Westvaco had engaged in any negligent conduct that could have caused the release of oil, as required by the Griffith and Marenghi line of cases.81
The judge ruled that fees were not recoverable because defendant's liability "was never reasonably clear" given the causation standard developed in Griffith and Marenghi as set out in the jury instruction.82 "In substance, a present owner plaintiff cannot recover from a former owner for oil contamination simply by proving that an underground storage tank leaked petroleum during defendant's ownership. Proof of causation requires some form of conduct as a result of which the release of oil occurs."83
III. The 'Metaphysics' of Causation
Arguably, the most influential statement on causation under Section 5(a)(5) was the trial judge's observation, in Marenghi, that the concepts of causation and duty are "interrelated."84 After that observation, Massachusetts courts treated "duty" and "causation" as interchangeable terms. It is true the terms are related in abundant, common law negligence decisions, but they are not interchangeable. A Massachusetts hornbook on negligence and causation makes it clear "[n]egligence and causal relation are distinct concepts"85 and both must be proved as a plaintiff's prima facie case of negligence.86 Causation clearly is not negligence; so, what is causation?
There are two components of causation: cause in fact and proximate cause.87 To prove cause in fact, a plaintiff must show the result would not have occurred "but for" the causal agent.88 In negligence cases, this translates into a requirement of proof that the injury would not have occurred in the absence of defendant's breach of a duty.89 However, when the requirement to prove actual cause is separated from the other elements of negligence, it raises a simpler requirement to show that the damage would not have occurred in the absence of the causal agent.
Massachusetts law defines "proximate cause" as "the active efficient cause that sets in motion a train of events which brings about a result without the intervention of any force started and working actively from a new and independent source."90 In negligence cases, Massachusetts courts define this standard more simply as "a greater likelihood that the accident is due to defendant's negligence than to some other cause."91 Once proximate cause is separated from the other elements of negligence, it merely requires plaintiff to show that specific damage was more likely than not due to a specific causal agent.
Although evidence of causation can be clear, two factors can produce complications: remoteness and the intervention of other forces.92 The best-known negligence case on remoteness of causation is the hornbook case Palsgraf v. Long Island R.R.,93 Judge Cardozo's opinion that the explosion of dropped fireworks at one end of a railroad platform was not the proximate cause of Ms. Palsgraf's injury from falling scales at the other end of the platform. Cardozo held that the defendant had only a duty of care to those within "the orbit of the danger as disclosed to the eye of reasonable vigilance."94 This holding focuses on the extent to which a defendant has perceived and exercised a duty of reasonable care. However, once again, in separating out the negligence, the causation question is simply whether the causal agent has a "significant" and "substantial" or "close" and "direct" link with the damage.95
As for intervening factors, a plaintiff must prove the chain of causation has not been broken by another causal agent that constitutes an intervening, independent and dominant cause.96 Multiple causes do not preclude a finding of liability; although successive causal agents may help produce the result, a defendant can be found to have caused the result as long as it has a "significant" and "substantial" or "close" and "direct" link with the damage.97 Commentators have observed three kinds of intervening causes: deliberate human interventions, abnormal natural events and subsequent preemptive causes.98 Abnormal natural events are "acts of God" that produce injury independent of the human act, but not naturally induced damage that may be prevented by reasonable human prudence, foresight or care.99 For instance, the Supreme Judicial Court has held that a party that contracted to deliver apples by a certain date set in anticipation of mild weather could not avoid damages sustained due to a late delivery when weather became colder after the delivery date and the apples froze during delivery:100 Damages "were not too remote" because they were not caused by an extraordinary natural event.101
In the context of Massachusetts General Laws chapter 21E, section 5(a)(5), the "causal agent" is "any person" and the "damage" is "a release of oil or hazardous material."102 A defendant "causes" a "release of oil" if it is both the actual cause and the proximate cause of the release. The defendant is the "actual cause" of the release if the release would not have occurred in the absence of that defendant's acts. The defendant is the "proximate cause" of the release, if the defendant was more likely than not the cause of the release. In the more complicated cases that raise issues of remoteness or intervening causes, the plaintiff must prove the defendant was an "active and efficient" cause of the release by showing defendant's significant and substantial link to the release. Simply put, based on the plain language of Section 5(a)(5), a defendant's responsibility for a release should not be based on a duty to prevent such a release but rather on a substantial connection to the release.
CERCLA's legislative history supports this construction of Chapter 21E. The initial House version imposed liability on "any person who caused or contributed to the release or threatened release."103 The House subcommittee intended "that the usual common law principles of causation, including those of proximate causation, should govern the determination of whether a defendant 'caused or contributed' to a release or threatened releases."104 Of course, the version of CERCLA ultimately adopted removed the "caused or contributed to" standard.105 Courts have resolved that Congress abrogated traditional concepts of causation in CERCLA's scheme of strict liability, and Massachusetts General Laws chapter 21E has been construed consistently with CERCLA except for section 5(a)(5), which expressly retains the concept of causation.
In one well-known case, the United States Supreme Court considered the requisite causal relationship between modifications to the environment and "takings" of endangered species protected under the Endangered Species Act (ESA).106 The litigation challenged an Interior Department regulation defining "harm" (a term used to define "takings" in the statute) as "an act which actually kills or injures wildlife," including "significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavior patterns, including breeding, feeding, or sheltering."107 In his dissent, Justice Scalia agreed with the challengers' position that the statute's use of the word "harm" to define a "taking" did not allow the Interior Department to expand the definition to include habitat modifications that "fortuitously injure protected wildlife, no matter how remote the chain of causation and no matter how difficult to foresee (or to disprove) the 'injury' may be (e.g., an 'impairment' of breeding)."108 In her concurring opinion, Justice O'Connor noted that the well-entrenched principal of proximate causation would ensure habitat change not adequately linked to takings would not lead to Endangered Species Act enforcement. She wrote: "In the absence of congressional abrogation of traditional principals of causation, then, private parties should be held liable under § 1540(a)(1) only if their habitat-modifying actions proximately cause death or injury to protected animals."109
The Supreme Judicial Court's Griffith decisions can be reconciled with a traditional reading of causation. In that case, after the defendant, New England Telephone, left the property, the underground storage tanks it had used were removed from the ground and showed no signs of having leaked.110 Griffith is best read as a case where the defendant's association with the release of oil was too remote to build a case of causation and where intervening factors broke New England Telephone's chain of causation.
Similarly, Marenghi can be read according to traditional concepts of causation. There, the plaintiff did not have a clear case of causation because it purchased the released oil from Mobil, leased the leaking underground storage tank from Mobil and used the oil in its own operations.111 The plaintiff's control over the leaking tank raised strong defenses to its case of causation against Mobil.
In contrast, Westvaco's sole ownership and operation of the abandoned leaking underground storage tank was enough to evidence a substantial connection and causation in Newly Weds. One possible defense raised by those facts is whether corrosion of Westvaco's underground storage tank, left in the ground for more than 30 years, should be considered an intervening cause that relieves defendant's causal link to the damage. The Wellesley Hills case sets out the federal District Court's opinion that natural corrosion should not break an owner or operator's causal link to contamination and liability under Massachusetts General Laws chapter 21E, section 5(a)(5).112 That reasoning is consistent with the common law approach to natural events as intervening causes - requiring such events to be extraordinary and unforeseeable to preclude a defendant's liability.113 It is neither extraordinary nor unforeseeable that steel will corrode from long-term exposure to the elements. When natural corrosion was combined with the discovery that the abandoned underground storage tank had been cut open and back-filled with sand by defendant (the sole prior owner or operator), the case of causation was compelling in Newly Weds, even during the Section 4A negotiation process.
One question raised at the outset of this article resurfaces here: What is the significance of the legislature's decision to omit oil contamination from section 5(a)(2), the section that holds past owners and operators of property liable for contamination caused by other hazardous substances?114 First, a traditional reading of the causation standard in Section 5(a)(5) provides a different result than the strict liability standard arising out of Section 5(a)(2). Despite the fact that a "strict liability" plaintiff must prove proximate causation under the common law, CERCLA cases have almost uniformly held differently.115 A CERCLA plaintiff can establish liability without proof the defendant actually or proximately caused the release that led to response costs.116 Once a CERCLA plaintiff establishes a prima facie case of liability, the burden shifts to the defendant to raise the causation issue in its defense.117 Many courts and commentators have noted there would be no reason to include causation-related defenses in CERCLA's statutory scheme (such as the third-party defense) if causation were considered an element of plaintiff's prima facie case.118 By contrast, however, in Massachusetts General Laws chapter 21E, section 5(a)(5) cases involving prior oil contamination, the burden remains with plaintiff to prove that defendant caused the release of oil contamination as part of its prima facie case. In a Section 5(a)(5) causation case, past owners or operators of oil contaminated property are not strictly liable for that contamination based solely on their status as owner or operator of the contaminated property, but instead are liable where they were the actual and proximate cause of contamination (i.e., where there is proof of a substantial connection to the release).
The omission of oil contamination from Section 5(a)(2) is no reason to alter the plain language of the statute by construing a simple causation element inconsistently with abundant precedent on the law of causation. The notion that causation requires proof of a breach of duty severely undermines the "legal responsibility" standard also included at Section 5(a)(5). The decision to read causation as negligence has led the courts to read "legal responsibility" narrowly as contractual responsibility.119 Regardless of how consistent the decisions have been (or might become) on this subject, contracts are not the only source of "legal responsibility" - tort is an equally important basis. The confusion of causation and legal responsibility has muddled the interpretation of a remedial statute that should be construed broadly to avoid frustrating its remedial purpose. 120
IV. Res Ipsa Loquitur?
Even if the causation standard in Massachusetts General Laws chapter 21E section 5(a)(5) has been properly construed to require proof of negligence, the Superior Court's decision in Newly Weds overlooked the doctrine of res ipsa loquitur. Under that doctrine, negligence may be proven by circumstantial evidence that the damage would not ordinarily occur in the absence of negligence, the damage was caused by an agency within the exclusive control of the defendant and the plaintiff was not responsible for causing the damage.121 Res ipsa loquitur operates where there is no direct evidence of specific acts of negligence but where the only plausible explanation for the damage is that it was caused by defendant's negligence.122 The instrumentality causing the damage must only be under the defendant's control at the time of the negligence and not at the time the damage is incurred, as long as intervening negligence did not contribute to the damage.123
Unfortunately for plaintiffs, circumstantial evidence tends to play a large role in the proof of Section 5(a)(5) cases involving past oil contamination. Due to the typical passage of time between the release of the oil and the start of the trial, witnesses and direct documentary evidence are often unavailable. A plaintiff's case often turns on defendant's willingness to be forthcoming with facts that are otherwise unavailable to plaintiff. In such cases, recognition of res ipsa loquitur would make plaintiff's burden more manageable by alleviating the requirement of specific proof of acts or omissions where circumstances indicate negligent conduct. However, Massachusetts's courts appear to disregard res ipsa in their Section 5(a)(5) decisions on breach of duty.
As discussed above, the Griffith plaintiff invoked res ipsa loquitur in support of its prima facie case of Section 5(a)(5) causation.124 In a footnote to that decision, the Supreme Judicial Court held out the possibility that plaintiff could have proved its Section 5(a)(5) case through res ipsa loquitur if it had been able to show exclusive control over the instrumentality that was the source of the contamination.125 It was not clear that the contamination occurred during New England Telephone's tenancy and, under those circumstances, the court decided there was insufficient demonstration of exclusive control.126 In Newly Weds, the Superior Court judge did not address the substance of Newly Weds Foods' res ipsa loquitur argument. However, the res ipsa claim was much stronger in Newly Weds than in Griffith. Westvaco was the only preceding owner and operator of the abandoned underground storage tank, and the contaminated premises and the release of heavy fuel oil clearly occurred before the sale of the premises. The Superior Court's decision to neglect a res ipsa claim in Newly Weds makes the imputed negligence standard especially egregious in Section 5(a)(5) cases where defendants commonly control the direct evidence, and circumstantial evidence is often the best plaintiffs can gather.
Many will argue that a purchaser of property takes the risk of discovering oil contamination derived from its predecessor's business. This risk is commonly managed by engaging environmental consultants and lawyers for inspections and negotiating contractual protection, including schedules of preexisting conditions and indemnification. Purchasers also may obtain insurance against the cost of responding to prior, latent oil contamination. Substantial liability protection is now available to those willing to pay the price.
However, oil contamination attributable to prior owners or operators will also continue to be found on properties that were purchased prior to the introduction of current methods and standards of environmental due diligence. In such circumstances, should the innocent purchaser of an oil-contaminated property bear the entire burden of remediation? Even if that might have been the standard when the purchase and sale agreement was negotiated, it certainly has not been the expectation since enactment of Massachusetts General Laws chapter 21E, which codified the "polluter pays" principle as Massachusetts's public policy.
Some states have enacted statutes that require owners to fully disclose environmental conditions at the time of property transfer.127 Some of these laws only apply to residential properties or to certain specific conditions (e.g., lead), but others address commercial and industrial properties and have broader disclosure parameters.128 Massachusetts has not adopted such a law for commercial or industrial properties.129 Nevertheless, when it passed Chapter 21E, the Massachusetts legislature sent a message that those causing and covering up contamination will pay for its cleanup; a message that was an important part of the statute's underlying remedial purpose.
Despite the perceived "metaphysics" of the law of causation, there is a significant difference between a causation and a negligence standard. The courts' failure to observe that difference in recent cases construing Massachusetts General Laws chapter 21E section 5(a)(5) has diminished the remedial effect of that statute and should be corrected.
1. 2002 WL 1923864 (Mass. Super. 2002).[back]
2. Mass. Gen. Laws ch. 21E.[back]
3. 42 U.S.C. §§ 9601-9675.[back]
4. Mass. Gen. Laws ch. 21E, §§ 4, 5 and 9; 42 U.S.C. §§ 9606-9607.[back]
5. Mass. Gen. Laws ch. 21E, §§ 4, 4A and 5; 42 U.S.C. 9607.[back]
6. Id. [back]
7. 42 U.S.C. § 9601(14).[back]
8. Mass. Gen. Laws ch. 21E, §§ 5(a)(1), (5).[back]
9. Mass. Gen. Laws ch. 21E, § 5(a) (emphasis added).[back]
11. Id. at 5(a)(2)-(4).[back]
12. 420 Mass. 365 (1995) (hereinafter Griffith II).[back]
13. 420 Mass. 371 (1995) (hereinafter Marenghi II).[back]
14. Griffith v. New England Tel., 414 Mass. 824, 825 (1993) (hereinafter Griffith 1).[back]
19. Griffith I, 414 Mass. at 825.[back]
21. Id. at 826.[back]
23. Griffith v. New England Tel., 32 Mass. App. Ct. 79, 81 (1992), rev'd 414 Mass. 824 (1993).[back]
25. Id. at 81-82.[back]
26. Id. at 84.[back]
27. Griffith I, 414 Mass. at 830.[back]
28. Id. [back]
29. Id. [back]
30. Id. [back]
31. Griffith II, 420 Mass. at 366 (1995).[back]
32. Id. at 367.[back]
34. Id. at 368-69.[back]
35. Id. at 369.[back]
36. Griffith II, 420 Mass. at 369.[back]
37. Id. at 369-70. [back]
38. Id. at 370.[back]
39. Id. at 370 n. 8.[back]
41. Marenghi v. Mobil Oil Corp., 416 Mass. 643, 644 (1993) (hereinafter Marenghi I).[back]
42. Id. See also Marenghi v. Barton, 1994 WL 879824, *3 n. 5 (Mass. Super. 1994) (clarifying Bartons leased underground storage tanks from Mobil). [back]
43. Marenghi I, 416 Mass. at 645.[back]
48. Marenghi I, 416 Mass. at 645.[back]
49. Id. at 646.[back]
50. Id. at 646-47.[back]
51. Id. at 644.[back]
52. 747 F. Supp. 93, 97-98 (D. Mass. 1990).[back]
53. Id. at 97.[back]
55. Id. at 98.[back]
56. It should also be noted that the Wellesley Hills case was decided before the Supreme Judicial Court received the Griffith case and was cited in Griffith I but ignored entirely in Griffith II. See Griffith I, 414 Mass. at 827. In both Griffith I and II, the Supreme Judicial Court neglected to address the federal court's treatment of section 5(a)(5) causation.[back]
57. Marenghi I, 416 Mass. at 647.[back]
58. Id. [back]
59. Marenghi v. Barton, 1994 WL 879824, *4 (Mass. Super. 1994).[back]
60. Id. at *2-3. For clarity, Griffith II had not been decided at the time of the Superior Court's second decision in Marenghi.[back]
61. Id. at *3.[back]
62. Id. at *4. The Superior Court judge said breaches of common law duties could give rise to liability under section 5(a)(5) but he did not say such a breach was an absolute prerequisite to such liability.[back]
63. Id. at *1.[back]
64. Marenghi II, 420 Mass. 371 (1995).[back]
65. Id. at 373-74.[back]
66. Id. at 374.[back]
69. 2002 WL 1923864 (Mass. Super. 2002) (hereinafter Newly Weds).[back]
70. Id. at *1.[back]
71. Statement of Agreed Facts at ¶15, Newly Weds Foods, Inc. v. Westvaco Corp., 2002 WL 1923864 (Mass. Super. 2002).[back]
72. Id. at ¶¶ 1, 5.[back]
73. Newly Weds, 2002 WL 1923864 at *2.[back]
74. Id. at *2.[back]
75. James Conrad, Jr., Environmental Science Deskbook § 10:3 (2000) (1981 American Petroleum Institute study concluded unprotected underground steel tanks have an average life expectancy of 15 years).[back]
76. Id. at *3.[back]
78. Mass. Gen. Laws ch. 21E, § 4A.[back]
79. Mass. Gen. Laws ch. 21E, § 4A(d)(3).[back]
80. Newly Weds, 2002 WL 1923864 at *1. Plaintiff would have been entitled to fees under Massachusetts General Laws chapter 21E section 15 if the jury had not allocated liability to the plaintiff. Martignetti v. Haigh-Farr Inc., 425 Mass. 294, 320 (1997) (Section 15 provides fee recovery for innocent party advancing purpose of statute). However, given the jury's allocation, plaintiff sought fees under section 4A.[back]
81. Newly Weds, 2002 WL 1923864 at *2.[back]
82. Id. at *3-5.[back]
83. Id. at *5.[back]
84. Marenghi v. Barton, 1994 WL 879824, *4 (Mass. Super. 1994).[back]
85. Richard W. Bishop, Mass. Prac. Prima Facie Case §§ 17.1, 17.10 (4th ed. 1997).[back]
86. Id.; see also Cannon v. Sears, Roebuck & Co., 374 Mass. 739 (1978).[back]
87. LeBoeuf v. Ramsey, 503 F. Supp. 747, 757 (D. Mass. 1980) ("Legal cause subsumes two elements: (1) causation in fact . . . and (2) rules limiting the scope of liability because of the manner in which the conduct has resulted in the harm"), rev'd on other grounds, Costa v. Markey, 677 F.2d 158 (1st Cir. 1982).[back]
88. Jorgensen v. Mass. Port Auth., 905 F.2d 515, 522-23 (1st Cir. 1990); Howard J. Alperin, Massachusetts Practice Summary of Basic Law § 20.231 169-71 (3d ed. 1996).[back]
89. Jorgenson, 905 F.2d at 522-23.[back]
90. Id., citing Lynn Gas & Electric Co. v. Meridan Fire Ins. Co., 158 Mass. 570, 575, (1893); Hill v. Assoc. Transp., Inc., 345 Mass. 55, 58, (1962).[back]
91. Bishop, supra note 85 at § 17.10 (internal citations omitted).[back]
93. 162 N.E. 99 (N.Y. 1928).[back]
94. Id. at 100.[back]
95. Bishop, supra note 85 at § 17.10.[back]
96. Id. citing Bellows v. Worcester Storage Co., 297 Mass. 188 (1937).[back]
97. Id. citing Wallace v. Ludwig, 292 Mass. 251, 255 (1935).[back]
98. Michael S. Moore, The Metaphysics of Causal Intervention, 88 Cal. L. Rev. 827 (2000).[back]
99. Dennis Binder, Act of God or Act of Man?: A Reappraisal of The Act of God Defense in Tort Law, 15 Rev. Litig. 1 (1996).[back]
100. Fox v. Boston & M.R. Co., 148 Mass. 220, 221 (1889).[back]
101. Id.; see also Simons v. Murray Realty, 330 Mass. 194, 197 (1953) (negligent defendant could have anticipated accumulation of snow and ice on roof of garage); Cf. Bratton v. Rudnick, 283 Mass. 556, 561 (1933) (extraordinary and unprecedented rainfall causing overflow of reservoir is intervening cause).[back]
102. Mass. Gen. Laws ch. 21E, § 5(a)(5).[back]
103. H.R. Rep. No. 96-1016, pt. I, at 33-34 (1980), reprinted in 1980 U.S.C.C.A.N. 6119, 6136-37.[back]
105. 42 U.S.C. § 9607(a).[back]
106. Babbitt v. Sweet Home Chapt. of Comm. for a Great Oregon, 515 U.S. 687, 687 (1995).[back]
107. Id. at 690.[back]
108. Id. at 721.[back]
109. Id. at 712, citing Benefiel v. Exxon Corp., 959 F.2d 805, 807-08 (9th Cir. 1992) (in enacting the Trans-Alaska Pipeline Authorization Act, which provides for strict liability for damages that are the result of discharges, Congress did not intend to abrogate common law principles of proximate cause to reach "remote and derivative" consequences); New York v. Shore Realty Corp., 759 F.2d 1032, 1044, and n. 17 (2d Cir. 1985) (noting that "[t]raditional tort law has often imposed strict liability while recognizing a causation defense," but that, in enacting CERCLA, Congress "specifically rejected including a causation requirement.").[back]
110. Griffith I, 414 Mass. at 825.[back]
111. Marenghi I, 416 Mass. at 644; Marenghi v. Barton, 1994 WL 879824, *3 n. 5 (Mass. Super. 1994) (clarifying that the Bartons leased underground storage tanks from Mobil).[back]
112. Wellesley Hills, 747 F.Supp. at 98.[back]
113. Supra notes 96-101 and accompanying text.[back]
114. Mass. Gen. Laws ch. 21E, § 5(a)(2).[back]
115. Griffith I, 414 Mass. at 825; Acushnet Co. v. Mohasco Corp., 191 F.3d 69, 75-76 (1st Cir. 1999). See also Lisa Goodheart & Karen McQuire, Revisiting the Issue of Causation in CERCLA Contribution Litigation, 82 Mass. L. Rev. 315, 323 (1998) (citing "nearly uniform line of cases holding that CERCLA plaintiff need not establish a direct causal connection between the defendant's conduct and the resulting harm.")[back]
116. Goodheart & McGuire, supra note 115 at 323.[back]
117. 42 U.S.C. § 9607(b)(1) ("act of God"), (2) ("act of war") or (3) ("act or omission of third party"). It should be noted here that a defendant must also prove it exercised due care and took precautions against foreseeable acts to avail itself of the "third party" defense. In addition, if defendant cannot take advantage of CERCLA defenses and more than one entity are liable, defendant can use its causation-based arguments as equitable justification for a reduced or even abrogated allocation. 42 USC § 9613(f); Acushnet, 191 F.3d at 78.[back]
118. Goodheart & McGuire, supra n. 115 at 324; U.S. v. Pretty Prods., 780 F.Supp. 1488, 1499 n. 14 (S.D. Ohio 1991); U.S. v. Monsanto, 858 F.2d 160, 169-70 (4th Cir. 1988), cert. denied 490 U.S. 110 (1989).[back]
119. See e.g., Griffith II, 420 Mass. at 367-69; Marenghi II, 420 Mass. at 373-74.[back]
120. United States v. Kayser-Roth Corp., 910 F.2d 24, 26 (1st Cir. 1990); One Wheeler Road Assocs. v. Foxboro Co., 843 F.Supp. 792, 795 (D.Mass. 1994) (Chapter 21E, like CERCLA, is a remedial statute that should be construed broadly to avoid frustrating the statute's purpose).[back]
121. Alperin, supra note 88 at § 20.224 (internal citations omitted).[back]
123. Id. citing LeBlanc v. Ford Motor Co., 346 Mass. 225 (1963).[back]
124. Griffith II, 420 Mass. at 370 n. 8.[back]
126. Id. At least one subsequent court has misread that fact-specific conclusion as a statement that res ipsa loquitur cannot be used to prove causation under § 5(a)(5). Domestic Loan and Investment Bank v. Ernst, 1998 WL 1284185, *5 (Mass. Super. 1998) (res ipsa evidence cannot substitute for direct evidence where underground storage tank was in ground for no more than 20 years and there is no direct evidence that defendant breached a duty and caused a historic release of oil when defendant owned and operated the property).[back]
127. See, e.g., N.J. Stat. § 13:1K-7; Conn. Gen. Stat. § 22a-134.[back]
128. Id.; see also Cal. Civ. Code § 1102.[back]
129. One might argue that Massachusetts General Laws chapter 93A should provide this kind of protection but the Massachusetts Consumer Protection Act has been construed to set a very high burden for plaintiffs (akin to fraud) and will only help plaintiffs in the most egregious property transfer cases involving knowing non-disclosure of latent contamination. Newly Weds, 2002 WL 1923864 at *4 (court issued judgment for defendant on Chapter 93A and commented that plaintiff was "too fond" of its 93A claim).[back]