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In 1988, BNSF Railway and Union Pacific Railroad sold their interest in a parcel of land in Stockton, California, to the city’s redevelopment agency. That agency then sold a portion to a commercial developer who discovered that the soil and groundwater had long been contaminated. Officials determined that (1) a nearby petroleum facility was source of the pollutants and (2) several spills in the 1970s had sent petroleum onto the property through an underground drain. Under its agreement with the developer, Stockton’s redevelopment agency spent nearly $2 million cleaning the site.

In 2005, the agency sued the railroads for reimbursement, claiming they were liable for the contamination under common-nuisance law and California’s Polanco Redevelopment Act, which governs the rehabilitation of former industrial sites throughout the state. The trial court agreed and awarded the agency more than $800,000 in damages and an injunction, holding that the railroads were liable for the contamination because they installed the underground drain through which the contaminants migrated onto the property. The trial court found that, had the railroads not installed the drain, the land would not have been damaged.

On appeal, the Ninth Circuit Court of Appeals rejected the trial court’s decision, noting that no precedent allowed but-for causation to establish nuisance liability:

We cannot agree that such passive but-for causation is sufficient for nuisance liability to attach. Under California law, conduct cannot be said to “create” a nuisance unless it more actively or knowingly generates or permits the specific nuisance condition.

The court then remanded the case back to the trial court for entry of summary judgment for the railroads.

For the full story, click here.

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