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United States v. Outboard Marine Corp.

ELR Citation: 16 ELR 20708
Nos. No. 85-1584, 789 F.2d 497/24 ERC 1273/(7th Cir., 04/22/1986) District court decision granting plaintiffs' motion to dismiss without prejudice aff'd

The court holds that the district court did not abuse its discretion when it granted the United States' motion to dismiss without prejudice its action under §106 of the Comprehensive Environmental Response, Compensation, and Liability Act to compel appellants to remove polychlorinated biphenyls (PCBs) from Waukegan Harbor in Illinois. The government requested the dismissal, granted on the condition that the government would not sue appellants except in a §107 cost recovery action, so it could proceed to remove the PCBs under §104, instead of pursuing a potentially lengthy trial on its §106 action, and later bring a §107 action to recover its cleanup costs. The court holds that appellants will not suffer legal prejudice as a result of the dismissal. The court rejects appellants' argument that the government's decision was motivated by the government's fear that it would not prevail at trial under §106. The government's interest in protecting the public and the environment from the effects of PCBs justifies its decision to remove the PCBs instead of pursuing its §106 claim, which could take years to litigate. The court also rejects appellants' contention that they would be prejudiced by a delay in the case since the government could ave cleaned up the harbor under the authority of the Federal Water Pollution Control Act. After battling the government for six years in court, appellants cannot now claim that they would be harmed by a further delay in this protracted litigation.

The court holds that appellants will not be prejudiced by losing the opportunity to obtain a favorable ruling from the district court dismissing the government's §106 claim. The district court had expressed a "sixty percent comfort" in its prior holdings that the government had stated a claim under §106, and the government's agreement not to sue appellants except in a §107 cost recovery action prevents it from bringing another action seeking the same injunctive relief. The court refuses to address appellants' claim that they would have prevalied at trial because the government could not establish that the harm caused by the PCBs justified the removal costs. The court expresses serious doubts about the propriety of a trial in the district court on the §106 issue. The government has begun its removal of the PCBs so there is no longer a valid reason for the injunctive relief requested under §106. If the government decides to discontinue its removal operation until after the trial, the district court would likely not have jurisdiction over appellants' preenforcement challenge to the government's proposed remedy as it appears in EPA's Record of Decision. Further, appellants will be able to raise any defenses it could have raised at a trial on the §106 action, including a claim that the cleanup was inconsistent with the cost-effectiveness requirements of the National Contingency Plan, in a subsequent cost recovery action. Third, appellants have not been put to undue expense or effort. While appellants have incurred substantial costs, the district court awarded them costs and they will no longer have to defend against the government's claims for injunctive relief. In addition, appellants' concern with continued unfavorable publicity does not justify an unwarranted trial.

Finally, the court rejects appellants' argument that the §106 action should be dismissed with prejudice and the anticipated §107 cost recovery action should thus be precluded by res judicata. The court observes that since it has concluded that the district court did not abuse its discretion in dismissing the §106 claim without prejudice, it need not reach the res judicata issue.

[Related decisions in this litigation appear at 10 ELR 20323; 12 ELR 20797, 21153; 13 ELR 20033, 20035; 15 ELR 20900, 21094.]

Counsel for Plaintiff-Appellee
John T. Stahr
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2000

James Hynes, U.S. Attorney
Everett McKinley Dirksen Bldg., Rm. 1500 S., 219 S. Dearborn St., Chicago IL 60604
(312) 353-5300

Counsel for Defendant-Appellant
Jan Feldman
Phelan, Pope & John, Ltd.
180 N. Wacker Dr., Chicago IL 60606
(312) 621-0700

Richard Kissel
Martin, Craig, Chester & Sonnenschein
115 S. LaSalle St., Chicago IL 60603
(312) 368-9700

Before BAUER and COFFEY, Circuit Judges, and ESCHBACH, Senior Circuit Judge.