Prop 65 Underground Storage Tank Litigation

The Background

At a December 4, 1997, Prop 65 seminar held by the Los Angeles County Bar Association, noted private enforcer Jim Wheaton let the audience know that operators of leaking underground storage tanks faced potential actions alleging violation of Prop 65's discharge prohibition. Wheaton noted that migrating underground contaminants have been considered to be "discharges" under state water quality law, and that he would likely focus on whether contaminants were currently migrating, and whether the operator was under a remediation order from a local agency as key factors in assessing whether a Prop 65 cause of action could be asserted. Significantly, he appeared to take the position that the time of the original release from a UST was not determinative of whether a currently migrating contaminant violated the discharge prohibition. This position appears to be in response to the trend by water quality agencies to adopt the 1995 report from Lawrence Livermore National Laboratories that suggested bioremediation as the preferred method of resolving most UST leaks.

The Threat of Litigation

In October and November 1998, two private enforcers served the first large-scale wave of 60-day notices against alleged discharges from USTs. Consumer Advocacy served a set of notices in October, and in November, Citizens for a Better Environment served several thousand notices against essentially all of the sites on the RWQCB's leaking underground storage tank list. These threatened enforcement actions are directed at all of the major oil companies, at sites throughout the state.

Litigation Commences

On January 6, 1999, Orange County District Attorney Tony Rackauckas filed at least two separate enforcement actions over alleged illegal discharges in the County. (People v. Atlantic Richfield Co, Orange County Super. Ct. no. 804030, and People v. Shell Oil Co., Orange County Super. Ct. no. 804031).

On January 19, CBE filed its enforcement action in San Francisco Superior Court against Tosco, Exxon, Texaco, Chevron, Shell, Arco, and numerous others (Communities for a Better Environment v. Tosco Corp, et al, no. 300613).

Declaratory Relief Against Private Enforcer Dismissed

A Los Angeles Superior Court has dismissed a declaratory relief complaint filed by Equilon (Shell and Texaco) against Consumer Cause, under the California anti-SLAPP statute. Read more.

60-Day Notices Upheld

On June 25, 1999, Judge Garcia of the San Francisco court overruled demurrers in CBE v. Tosco, in which the defendants asserted that the 60-day notices served by CBE did not adequately apprise them of the nature of the allegations being made against them.   The court did, however, order CBE to strike from its complaint any of the service stations which were named in the first-filed Consumer Cause v. Atlantic Richfield, pending in Los Angeles County.

Courts Sharply Limit Reach of Prop 65 to Historical Discharges

On December 9, 1999, a Los Angeles Superior Court drastically limited the scope of Prop 65's application to UST discharges in CBE v. Boeing North American, which sought to enforce the act against discharges at the Rockewell Santa Susana Field Lab in Ventura County.  CBE had alleged that Boeing had violated Prop 65 for each day that an historic release from a UST remained in the ground, and that penalties should be imposed separately for each chemical, and each day such chemical remained in the ground or water.

The court disagreed with CBE's theory, limiting civil penalties only to active discharges that occurred less than one year prior to the filing of the complaint in January 1998, and limiting restitution under the Unfair Competition Statute to active discharges that occurred less than four years prior to the filing of the complaint.   The court denied CBE's motion for an injunction to clean up the site, which sought more stringent relief than ordered by ongoing agency oversight, ruling that Prop 65 is "a discharge statute and not a cleanup statute and does not apply to post-discharge contamination."

On January 12, 2001, Judge Stuart Pollak of the San Francisco Superior Court held, in CBE v. Tosco, that Prop 65 did not apply to migrating contamination.  The ruling held that a Prop 65 discharge "refers only to the initial movement of the chemicals out of a confined space, such as a storage tank, a pipe or a sludge pond."  

Agreeing with the Boeing court, Pollak ruled that:

 "The subsequent passive migration of chemicals through soil or groundwater after they have left a party's storage or other facilities does not constitute a new discharge or release.  Toxic chemicals that remain standing on a person's property may be discharged or released into the environment by rainwater runoff, but once the chemicals have percolated into the ground, they are not continuously re-'discharged' or re-'released' because of subsurface migration or the failure to remediate.' "

Also considering the ballot arguments, Judge Pollak stated that the intent of Prop 65 was not "to punish the failure to clean up chemical spills.  There is absolutely no mention of cleanup, [footnote] remediation, or of any conduct other than putting chemicals 'into' the environment."

This page last updated April 30. 2001