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United States v. Green

Citation: 29 ELR 21192
No. No. 97-CV-0271A, 33 F. Supp. 2d 203/48 ERC 1110/(W.D.N.Y., 12/10/1998)

The court denies all but one affirmative defense raised by a resin manufacturing plant and its principal against the United States in the government's suit for response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in connection with the Polymer site in Tonawanda, New York. The court also dismisses the plant's counterclaim against the United States and its third-party complaint against the on-scene coordinator of the site. The court first holds legally insufficient the defendant plant and principal's first affirmative defense that they are exempt from liability under CERCLA § 107(b). The defendants failed to allege that the releases or threats of releases of hazardous substances resulted solely from the causes enumerated under CERCLA § 107(b). They also failed to allege that they either exercised the requisite due care or took the necessary precautions to sustain a legally sufficient affirmative defense. However, the defendants may replead such defense in a legally sufficient manner.

The court next holds that the defendants are collaterally estopped from litigating their second and third affirmative defenses that any release of hazardous substances at the plant occurred solely in the work-place and that many of the hazardous materials detected at the plant were either of minuscule quantity or had been altered so that they no longer qualified as hazardous substances under CERCLA. These defenses involve identical issues that were actually litigated and decided in an earlier case in which the U.S. Environmental Protection Agency (EPA) sought court-ordered access onto the Polymer site to enable cleanup and removal of hazardous substances. In the earlier case, the defendants had a full and fair opportunity to litigate the issues contained in the second and third affirmative defenses, and the issues were necessary to support a valid and final judgment on the merits.

The court, however, then holds legally sufficient the defendants' fourth affirmative defense that the principal did not engage in any activity for which personal liability may be imposed under CERCLA. Although the principal admits that he owned and exercised control over the plant, the United States does not challenge the fourth affirmative defense on the basis that the principal may be held liable as either an owner or operator. Moreover, the principal's assertion that he was not personally involved in any kind of wrongdoing or illegal activity that would justify imposing liability on him personally is a denial of the type of activity required under United States v. Bestfoods, 118 S. Ct. 1876, 28 ELR 21225 (1998), to impose CERCLA liability as an operator. Further, the principal does not admit to any activity that would support piercing the corporate veil.

The court then dismisses for lack of jurisdiction the defendants' counterclaim that EPA's management of the site during its occupation in connection with removal and cleanup operations was grossly negligent and resulted in property damage. The relationship between the acts underlying the need for remediation and the conduct of EPA's cleanup activity are too attenuated to demonstrate that the counterclaim is compulsory. Accordingly, the counterclaim is permissive and the administrative exhaustion requirement applies. Alternatively, the court holds that the defendants' counterclaim is barred by the discretionary function doctrine and must be dismissed for lack of subject matter jurisdiction. The court also dismisses for lack of jurisdiction the defendants' counterclaim for recoupment. Recoupment claims for damages arising from remediation activity are impermissible in a CERCLA action. Alternatively, the court holds that the defendants failed to state a claim for recoupment.

Last, the court dismisses for lack of jurisdiction the defendants third-party claim against the on-scene coordinator of the site. The defendants asserted that the coordinator acted arbitrarily and ignored his responsibilities toward the defendants by directing the activity that caused the defendants to incur property damage, resulting in a taking in violation of the Fifth Amendment's Due Process Clause. It is undisputed, however, that the defendants never availed themselves of the remedy available for unlawful takings afforded under the Tucker Act. Further, no other clearly established constitutional right has been asserted as violated.

Counsel for Plaintiff
Denise E. O'Donnell
U.S. Attorney's Office
Federal Center
138 Delaware Ave., Buffalo NY 14202
(716) 551-4811

Counsel for Defendant
Jeffrey M. Blum
Law Offices of Jeffrey M. Blum
7106 Meadow Ridge Dr., Louisville KY 40218
(502) 495-1206