Refusal to allow oil company access to property to investigate contamination does not bar RCRA claim

Law Reporter, Mar 2003

TOXIC TORTS

Albany Bank & Trust Co. v. Exxon Mobil Corp., 310 F.3d 969 (7th Cir. 2002).

The Seventh Circuit Court of Appeals held that a landowner's refusal to allow an oil company access to its property to investigate a petroleum spill there does not bar the landowner's suit under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6972.

In this case, Exxon Mobil Corporation (Exxon) owned a gas station that spilled petroleum from its underground storage tank. Exxon requested permission from the tenant of adjacent property to investigate the spill. The landowner, Albany Bank & Trust Company (Albany), refused to allow Exxon access to the property unless Exxon would agree to remove any contamination it discovered and reimburse Albany's remediation expenses. Exxon did not agree to these conditions. Albany subsequently investigated the spill and discovered high levels of methyl tertiary butyl ether (MTBE), a gasoline additive, and benzene in the soil and groundwater on its property. Albany sued Exxon under the RCRA, seeking injunctive relief and payment of attorney fees and the cost of investigation.

Defendant moved to dismiss the suit on the basis that plaintiff failed to state a claim because defendant did not have a duty to remediate the spill before investigating it, and plaintiff would not allow it to investigate. Defendant cited Aurora National Bank v. Tri Star Mktg., Inc, 990 F. Supp. 1020 (N.D. Ill. 1998), claiming that plaintiff's refusal to allow it to investigate caused plaintiff to forfeit its right to seek an order for an investigation under the RCRA. The trial court agreed, dismissing the suit.

The Seventh Circuit reversed, holding that the plaintiffs complaint contained all three required prima facie allegations under the RCRA: (1) that the defendant has generated solid or hazardous waste, (2) that the defendant is contributing to or has contributed to the handling of the waste, and (3) that the waste may present an imminent and substantial danger to health or the environment. Since Albany alleged every element of a prima facie case under the RCRA, dismissal was inappropriate, the court held.

Furthermore, the court said, while the RCRA does not require the complete elimination of pollution from plaintiff's property, Illinois law may require it, because the RCRA explicitly preserves state law remedies as gap fillers to its remedies scheme. Thus, plaintiff's proposed agreement cannot be construed as an attempt to impede enforcement of environmental laws for its own financial advantage.

Accordingly, the court reinstated all of plaintiffs claims and remanded for further proceedings.

Plaintiffs Counsel

Frank M. Grenard, Des Moines, Iowa

Comment: For another MTBE pollution case holding that state environmental law does not conflict with federal environmental law, see Abundiz v. Explorer Pipeline Co., No. CIV.3:00-CV-2029-H, 2002 WL 1592604 (U.S. Dist. Ct., N.D. Tex. July 17, 2002). There, the court held that in determining whether federal law preempts state law, a court must determine whether the state law is such an obstacle to Congress's objectives in writing the federal law as to make it impossible to comply with both. In this case, the court held, Texas law is not an obstacle to compliance with the Clean Air Act, 42 U.S.C. (secs) 9601 et seq. Accordingly, it denied defendant's motion to dismiss.