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Douglass v. Shamrock Paving, Inc.

Supreme Court of Washington, En Banc

December 21, 2017

HARLAN D. DOUGLASS and MAXINE H. DOUGLASS, husband and wife, Respondents,
v.
SHAMROCK PAVING, INC., a Washington corporation, Petitioner.

          FAIRHURST, C.J.

         Landowners Harlan and Maxine Douglass (Douglass) brought a private right of action against Shamrock Paving Inc. under the Model Toxics Control Act (MTCA), chapter 70.105D RCW, to recover costs incurred from an alleged remedial action. Shamrock trespassed onto Douglass' vacant property and spilled unknown amounts of lube oil. Douglass paid for soil testing and soil removal to clean up his property and now seeks recovery of those costs under the MTCA. At issue is the interpretation of "remedial action" within the statute, whether the lube oil on Douglass' property created a "potential threat" to human health or the environment, and which party is entitled to prevailing party status for purposes of awarding attorney fees. RCW 70.105D.020(33), .080. We affirm the Court of Appeals' holding that Douglass' soil testing was a remedial action but his soil removal was not. We reverse the Court of Appeals' prevailing party designation because it was made prematurely. We remand the case to the trial court.

         I. FACTS AND PROCEDURAL HISTORY

         A. Factual background

         Shamrock fueled its equipment, cleaned its machines, and stored its materials on Douglass' property while carrying out a paving project for the Washington State Department of Transportation. Based on these activities, the trial court found that Shamrock spilled unknown amounts of lube oil onto the property. Lube oil is a heavy oil (petroleum product) that is a "hazardous substance." RCW 70.105D.020(13)(d). After Shamrock's activities ceased, Douglass hired Tetra Tech Inc., an environmental consulting firm, to investigate the contamination on his property. Tetra Tech took three separate samples, measuring lube oil at 2, 000 mg/kg, 800 mg/kg, and 400 mg/kg. After reviewing the samples, Douglass ordered Tetra Tech to perform a cleanup operation, removing 68 tons of soil from the property. After the cleanup, Tetra Tech took two additional samples, measuring lube oil at 220 mg/kg and at less than 100 mg/kg.

         B. Procedural history

         Douglass initially sued Shamrock for trespass and nuisance. After testing the soil, Douglass amended the complaint to add a private right of action claim under the MTCA. The issues were bifurcated. A jury heard the trespass and nuisance claims and returned a verdict in favor of Douglass. The jury denied Douglass' request for cleanup costs. The judge heard the MTCA claim and found Shamrock had contributed to the release of hazardous substances, but denied Douglass' private right of action because Douglass failed to prove that the lube oil was a threat to human health or the environment. The judge designated Shamrock as the prevailing party pursuant to the MTCA and awarded attorney fees.

         Douglass appealed, and the Court of Appeals reversed. Douglass v. Shamrock Paving, Inc., 196 Wn.App. 849, 384 P.3d 673 (2016). The Court of Appeals focused on whether Douglass conducted a "remedial action" and ultimately concluded that the soil testing (investigation) was a "remedial action" based on the statutory definition but the soil removal (cleanup) was not. Id. at 860. The court relied on the MTCA's plain language, finding that "remedial action" includes "actions and expenditures taken to discern whether a potential threat in fact poses a danger to human health or the environment." Id. at 857. The court distinguished Division Two's prior interpretation of "remedial action" because that case considered only cleanup costs, not investigative costs. Id. at 857-58 (referring to Seattle City Light v. Dep't of Tramp., 98 Wn.App. 165, 989 P.2d 1164 (1999)). Regarding Douglass' cleanup costs, the Court of Appeals explained that "a cleanup effort must address a hazardous substance posing a threat or potential threat to human health or the environment." Id. at 859. The court deferred to the trial court's conclusion that the lube oil contamination did not meet this standard; thus, no recovery for cleanup costs was warranted. Id. Since Douglass established the elements of his MTCA claim for investigative costs, the Court of Appeals designated him the prevailing party entitled to recover attorney fees. Id. at 860. The court then remanded the case to the trial court to complete an assessment of equitable factors to determine the exact recovery amount. Id. at 858.

         Shamrock sought review of the Court of Appeals' decision. Douglass filed an answer asking the court to deny Shamrock's petition and filed a cross petition for review of the cleanup cost recovery. We granted review of both petitions. Douglass v. Shamrock Paving, Inc., 188 Wn.2d 1020, 399 P.3d 1105 (2017).

         II. ISSUES

         A. When lube oil contamination meets but does not exceed the Department of Ecology's (Ecology) cleanup level, can a party recover the cost of investigative activities as remedial action costs under MTCA's private right of action?

         B. Does lube oil contamination that meets but does not exceed Ecology's cleanup level pose a potential threat to human health or the environment?

         C. Under the MTCA, is a party who recovers remedial action costs the prevailing party, entitled to ...


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