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United States v. Rohm & Haas Co.

ELR Citation: 27 ELR 20251
Nos. 85-4386, 939 F. Supp. 1157/(D.N.J., 09/27/1996) CERCLA and state tort law recoupment counterclaim denied

The court holds that a company cannot bring counterclaims for contribution under §113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or for recoupment against a state agency that intervened in a suit by the U.S. Environmental Protection Agency (EPA) to recover costs EPA incurred in cleaning up toxic wastes at the Lipari landfill in Mantua Township, New Jersey. The company argued that the agency's participation in the current action constituted a waiver of its sovereign and Eleventh amendment immunities, thereby allowing the recoupment claim. The court first notes that the company's counterclaim for recoupment under CERCLA appears to be a §113(f) claim for contribution under which the company must show that the agency is a liable or potentially liable party under §107(a). The court holds that the company has not met this burden. The agency was not the owner or operator of the landfill at the time toxic substances were disposed of there. Moreover, the only actions with respect to the landfill that the company attributes to the agency within the relevant time period were to approve the landfill, inspect its operations periodically, and ultimately shut it down. The court holds that the agency cannot be the current owner of the landfill simply by means of the removal action. Aside from precedent that comes to the same conclusion, the court notes that this point seems moot because the agency was only involved in the remediation of the landfill in an advisory capacity. The court also holds that because there are no allegations that the agency ever disposed of hazardous substances at the landfill, the agency's liability as a generator, transporter, or disposer can easily be rejected as well. The court then dismisses the company's counterclaims for contribution, restitution, and other equitable relief under state tort law because the company did not address or refute the agency's contention that the New Jersey Tort Claims Act (NJTCA) and principles of sovereign immunity require that these counterclaims be dismissed. The court next turns to the company's state-law recoupment counterclaims. The court holds that Congress enacted CERCLA to be its own statutory framework and that allowing recoupment claims allows remnants of the common law to infect what Congress meant to establish with CERCLA—the abolishment of common law doctrine with respect to cleanup of hazardous-waste sites. Additionally, because CERCLA provides the company with clear statutory relief similar to that which it seeks under its recoupment claim, it is reasonable to conclude that the doctrine does not apply in the CERCLA context. The court further holds that the agency did not waive its Eleventh Amendment immunity because it is clear in light of the agency's position as plaintiff-intervenor that the agency did not act voluntarily. The court next holds that regardless of the waiver and immunity issues, the company's recoupment counterclaim would be unsuccessful. The NJTCA provides the agency with immunity from claims that it failed to use proper discretion in enforcing the state and federal environmental laws. The court holds that the company's recoupment counterclaim based on alleged fraud by government contractors fails as well. The agency is not seeking recovery from the company for any costs associated with this fraud. Thus, the court grants the agency's summary judgment motion and dismisses the company's counterclaims.

[Another decision in this litigation is published at 27 ELR 20243.]

Counsel for Plaintiff
Joseph E. Hurley
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Frank E. Ferruggia
McCarter & English
Four Gateway Ctr.
100 Mulberry St., Newark NJ 07101
(201) 622-4444