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United States v. Northeastern Pharmaceutical & Chem. Co.

Citation: 14 ELR 20212
No. No. 80-5066-CV-SW-4, 579 F. Supp. 823/20 ERC 1401/(W.D. Mo., 01/31/1984) Ruling on nature of liability

The court holds a hazardous waste transporter and a corporate hazardous waste generator and two of its officers jointly and severally liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for government response costs incurred after enactment of CERCLA, including future response costs consistent with the National Contingency Plan (NCP). Relying on legislative history and past judicial interpretation, the court rules that § 7003 of the Resource Conservation and Recovery Act (RCRA) does not apply to past non-negligent off-site generators or transporters of hazardous waste. The court next rules that § 104, 106(a) and 107(a) of CERCLA do apply to inactive hazardous waste disposal sites. The language of §§ 104 and 107(a) and the legislative history of § 106(a) make it clear that Congress intended retroactive application. The court rules that Congress acted rationally in imposing liability for past acts and thus satisfied the Due Process Clause of the Fifth Amendment. However, the court declines to extend liability to cover response costs incurred before CERCLA's enactment on December 11, 1980. Nothing in the statute or legislative history indicates that Congress intended to allow recovery of pre-CERCLA response costs, and retroactive application should not be imposed absent clear congressional direction to do so.

The court next rules that strict liability applies under CERCLA §§ 104, 106(a), and 107(a). Section 101(32) dictates this result, since it directs that "liability" be construed under the standard for § 311 of the Federal Water Pollution Control Act and the courts have consistently interpreted § 311 as a strict liability provision. The court also finds defendants jointly and severally liable. CERCLA, it holds, allows joint and several liability. It is not clear whether liability is to be applied with reference to § 311 or common law, but joint and several liability would result under either in this case. The court concludes that the imminent and substantial endangerment at the Denney farm site is the result of actions taken in concert by defendants and that the harm is indivisible. These facts would support joint and several liability under Missouri law and under § 311.

The court rules that plaintiff met its burden of proving that a § 106(a) imminent and substantial endangerment existed at the Denney farm site by showing the presence of significant quantities of highly toxic dioxin and soil and bedrock conditions that made groundwater contamination likely.

The court rules that each defendant is a "person" subject to liability under CERCLA § 107(a) and that each is strictly, jointly and severally liable for response costs incurred. Defendant Mills is an independent contractor paid to transport hazardous wastes to the Denney farm site, which he selected, making him strictly liable under §§ 101(26), 104, and 107(a)(4). Defendant NEPACCO is the corporate entity that contracted for the transport and disposal of hazardous wastes at the Denney farm site and is a "person" as defined by § 101(21) and made strictly liable by §§ 104, 106(a), 107(a)(1), and 107(a)(3). Defendant Lee, vice president of NEPACCO and supervisor of the facility from which the wastes originated, directly arranged for the transport and disposal of the hazardous wastes at the Denney farm site. While § 107(a)(3) does not require that the person arranging for transport or disposal of hazardous wastes own or operate the facility generating them, as an officer and major stockholder in NEPACCO, Lee qualifies as an "owner or operator" of the generating plant under § 107(a)(1) and in fact had the capacity to control the disposal of the wastes. Defendant Michaels, president of the NEPACCO plant that generated the hazardous wastes and a major stockholder in the company, is liable on the same basis as Lee, even though he was not physically present at the plant during the period of waste disposal at the Denney farm site.

The court grants plaintiff's full claim for cost recovery, except for costs incurred prior to December 11, 1980. It rules that in an action under §§ 106(a) and 107(a), plaintiff need not have presented a claim to the fund or entered into a cooperative agreement with the state. The court also rules that the defendants carry the burden of proving that plaintiff's response costs were unrecoverable as inconsistent with the NCP and that they failed to carry the burden in this case. The court finds that CERCLA allows recovery of attorneys fees and other litigation costs under the § 104(b) definition of removal action. The court also awards prejudgment interest. Since the statute is silent on this subject, whether to grant an award is within the discretion of the court. The court finds defendants jointly and severally liable for prejudgment interest at nine percent per annum, concluding that this furthers the CERCLA congressional purpose of making responsible parties liable for "all costs."

Finally, the court grants a declaratory judgment to plaintiff, holding defendants jointly and severally liable for all future response costs not inconsistent with the NCP.

Counsel for Plaintiff
Vernon Poschel, Ass't U.S. Attorney
549 U.S. Cthse., 811 Grand Ave., Kansas City MO 64106
(816) 374-3122

John R. Barker
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-3907

Dan Shiel
Office of the Regional Counsel
Environmental Protection Agency, 324 E. 11th St., Kansas City MO 64106
(816) 758-2069

Counsel for Defendants
Gary T. Nelms
Jones, Keeter, Karchmer, Nelms, Sullivan & Kirby
P.O. Box 1185 SSS, Springfield MO 65805
(417) 862-9255

Milton Turkel
Gruber & Turkel
218 Bedford St., Stamford CT 06901
(203) 323-7789

Howard Holtzmann
Holtzmann, Wise & Shepard
745 5th Ave., New York NY 10022
(212) 753-4300

John C. Noonan
Stinson, Mag & Fizzell
P.O. Box 19251, Kansas City MO 64105
(816) 842-8600