Summary of a Recent
Judicial Development in
Animal Feeding Operations

Entire Hog Farming Complex Constitutes
"Facility" Under CERCLA

Harrison M. Pittman
Research Assistant Professor of Law & Staff Attorney

Summary of Decision

In Sierra Club v. Seaboard Farms, Inc., 387 F.3d 1167 (10th Cir. 2004), the United States Court of Appeals for the Tenth Circuit held that an entire hog farming complex constituted a single "facility" under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675, and was therefore subject to the CERCLA reporting requirements, 42 U.S.C. § 9603, for above-threshold releases of hazardous substances from a facility.

Background

Section 9603 of CERCLA requires that

Any person in charge of a vessel or an offshore or an onshore facility shall, as soon as he has knowledge of any release (other than a federally permitted release) of a hazardous substance from such vessel or facility in quantities equal to or greater than those determined pursuant to section 9602 of this title, immediately notify the National Response Center established under the Clean Water Act . . . of such release. The National Response Center shall convey the notification expeditiously to all appropriate Government agencies, including the Governor of any affected state.

42 U.S.C. § 9603(a).

Under CERCLA, a "facility" is defined as

(A) Any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel.

Id. at § 9601(9).

Defendant Seaboard Corporation (Seaboard) owned and operated a hog farming complex that was comprised of two separate but geographically contiguous hog farming operations. Sierra Club, 387 F.3d at 1168. Each hog farming operation contained eight buildings and together housed approximately 25,000 hogs. See id. The operations utilized a common waste management system that included multiple manure lagoons, barns, and land application areas. See id.

Plaintiff Sierra Club, Inc. (Sierra) brought an action in federal district court alleging that Seaboard knew of the hog farms' ammonia emissions and failed to report them as required by § 9603. See id. Sierra argued that the hog farming complex as a whole constituted a facility under CERCLA, rather than the lagoons, barns, and land application areas each constituting a separate facility for purposes of § 9603. See id. at 1169. Seaboard argued that the various lagoons, barns, and land application areas that comprised the hog farming complex were each a separate facility for § 9603 purposes. Id. In line with this argument, Seaboard contended that "because each lagoon, barn, and land application area is a separate facility, . . . [it] is obligated to report under . . . [§ 9603] only if the ammonia emissions for each individual facility exceed one hundred pounds per day." Id.

The federal district court initially ruled that the lagoons, barns, and land application areas each constituted a separate facility but that Seaboard was required to aggregate the quantity of ammonia released from each facility. See id. The court subsequently reversed its determination that Seaboard was required to aggregate the quantity of ammonia from each facility. See id. The practical result of this determination was that Seaboard was not liable for a failure to report its ammonia emissions under CERCLA. See id. Sierra appealed the ruling to the Tenth Circuit. See id.

Analysis and Holdings

The Tenth Circuit explained that in determining whether Seaboard was liable for failing to report its ammonia emissions under CERCLA, "the primary issue . . . is whether or not the district court's interpretation of the term 'facility' is correct." Id. It further explained that to make this determination it had to determine whether the definition of facility is unambiguous in accordance with the analytical framework espoused in Chevron USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) See id.

Chevron requires courts to consider whether the plain language of a statute is ambiguous by first determining whether Congress has "directly spoken to the precise question at issue." Id. (citation omitted). When Congress has directly spoken on the issue "that is the end of the matter." Id. (citation omitted). If, however, the statute "is silent or ambiguous as to the specific issue . . ., then . . . [courts] must defer to the agency's interpretation, if it is based on a permissible construction." Id.

The court agreed with the district court's interpretation of "facility" insofar as that interpretation was based on the language of § 9601(9)(A). Seaboard Farms, 387 F.3d at 1170. The court added, however, that § 9601(9)(A) must be read in conjunction with § 9601(9)(B), which includes within the definition of facility "any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." Id. The court stated that "[a]pplying normal principles of statutory construction, subpart (B) encompasses 'any site or area where a hazardous substance' has 'come to be located.' Giving 'effect to the unambiguously expressed intent of Congress, . . . we must hold that the entire contiguous . . . site is thus included." Id. at 1171. The court therefore reversed the district court, holding that the "unambiguously expressed intent of Congress" required the entire hog farming operation to be considered a facility. See id.

Based on the plain language of § 9603, the overall purpose of CERCLA, and federal courts' interpretations of the term "facility," the court rejected Seaboard's counter-argument that the term "facility" should be narrowly construed. See id. The court found it "telling" that in the plain language of § 9603 the conjunction "or" was placed between the two paragraphs defining the term facility, "thus providing two distinct definitions of what might constitute a facility." Id. It concluded that "the two-part disjunctive definition of 'facility' means whatever is appropriate for the facts at hand: not only '(A) any . . . pit, pond, lagoon, impoundment, [or] landfill . . . ,' but also '(B) any site or area where a hazardous waste substance was deposited . . . or placed, or otherwise come to be located.'" Id. (quoting 42 U.S.C. § 9601(9)).

The court also determined that the remedial purpose of CERCLA supported its holding. See id. at 1172 (citing Uniroyal Chem. Co. v. Deltech Corp., 160 F.3d 238, 257 (5th Cir. 1998) ("'Numerous courts . . . have recognized that CERCLA is a broad remedial statute.'")). It agreed with Sierra's contention that CERCLA "must be interpreted liberally so as to accomplish its remedial goals." Id.

The court rejected Seaboard's assertion that the federal courts' broad interpretations of the term facility were inapplicable because the term had not been decided in the context of a § 9603 action. See id. at 1173, 1174 ("Both sides agree that the circuits that have applied the term 'facility' have done so with a broad brush."). The court agreed that with the exception of Sierra Club, Inc. v. Tyson Foods, Inc., 299 F.Supp.2d 693 (W.D. Ky. 2003) courts had not interpreted the term in the context of a § 9603 action. See id. It determined, however, that there was "'no rational reason to disregard these cases in discussing the definition of the term 'facility' in a . . . [§ 9603] reporting case.'" Id.

After examining several decisions that interpreted the term "facility" in non-§ 9603 contexts, the court stated that

"CERCLA defines 'facility' once in the definition section of the statute and its meaning should be interpreted consistently throughout the entire statute. Accordingly, 'facility' for reporting purposes, cleanup purposes or any other statutory purpose extend [sic] to the bounds of the contamination.'" We therefore presume that Congress intended that the term have the same meaning in each of the pertinent sections or subsections of the statute . . . ."

Id. at 1175 (quoting Tyson, 299 F.Supp.2d at 699; SKF USA, Inc. v. United States, 263 F.3d 1369, 1382 (Fed. Cir. 2001)).

Finally, the court examined interpretations of the term "facility" offered by the EPA, interpretations that Sierra and Seaboard each relied on to support their positions. See id. The court noted that the EPA's interpretations of "facility" "appears to cut both ways." Id. at 1176. It concluded, however, that the EPA's "ruminations" need not be considered in light of the court's holding that § 9603 was unambiguous. See id.

Conclusion

The Tenth Circuit held that the entire hog farming complex constituted a "facility" under CERCLA rather than the lagoons, barns, and land application areas each constituting a separate facility, because the plain language of § 9603 is "unambiguous and unequivocal." Id. It also held that the disjunctive language of § 9603, CERCLA's remedial purpose, and the courts' broad interpretation and application of § 9603 "further bolster a definition of a 'facility' that encompasses the entire . . . [hog farming complex]." Id.

The case was decided on October 28, 2004 ; this summary was posted Aug. 25, 2005.