Velsicol Chemical Corp. v. Reilly Tar & Chemical Corp.

No. CIV-1-81-389 (E.D. Tenn. August 16, 1984)

The court holds that plaintiff may seek a declaratory judgment pursuant to § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) to establish defendant's liability for the disposal of coal tar sludge in a holding tank located on property sold to plaintiff by defendant. Initially the court holds that plaintiff's claims under CERCLA and Tennessee law are material to its claim for declaratory and injunctive relief. Next, the court holds that plaintiff's claims are not barred by exclusive administrative jurisdiction because the statute provides private parties with the right to recover response costs from responsible third parties. The court rules that plaintiff's claim for response costs constitutes a sufficiently real controversy to support its request for a declaratory judgment.

The court rules that plaintiff lacks standing to seek injunctive relief against defendant, because CERCLA § 106 abatement actions may be brought only by the United States and no other provision in the Act provides a basis for plaintiff's claim.Considering plaintiff's claim for damages, the court rules that investigative costs constitute response costs as defined by CERCLA. A contrary decision can be distinguished and investigative costs are a necessary part of the response. The court rules that plaintiff has alleged a threat of release under CERCLA. Plaintiff's failure to specifically allege a release or threat of a release of a hazardous substance does not defeat its claim for response costs. Its assertion that the coal tar may reasonably be anticipated to pose a danger to the environment is sufficient. Rejecting defendant's argument that the coal tar, contained in a concrete cistern with a wooden cover, cannot enter the environment, the court declines to rule as a matter of law that the existence of the concrete container precludes a finding of "disposal" under CERCLA. Finally, the court rules that plaintiff is a proper party to bring a private cause of action under § 107. The reference to "any other party" in § 107(a)(4)(B) means any person other than the United States or a state. Despite defendant's contention that CERCLA § 107 limits private rights of action to non-liable parties, the court rules that plaintiff's potential liability as the owner of the dumping site does not bar it from seeking recovery of response costs.

Counsel for Plaintiff
Michael W. Boehm, James W. Gentry Jr.
Gentry and Boehm
Suite 600, Dome Building, Chattanooga TN 37402
(615) 756-5020

Counsel for Defendant
Harry F. Burnette
512 First Tennessee Building, Chattanooga TN 37402
(615) 756-4122

[15 ELR 20104]

MILBURN, J.:

Memorandum

Plaintiff Velsicol Chemical Corporation (Velsicol), has brought this action against Reilly Tar & Chemical Corporation (Reilly) under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601 to 9657 (1983) and Tennessee's Hazardous Waste Management Acts of 1975 and 1983, Tenn. Code Ann. §§ 68-46-101 to - 114, 68-46-201 to -221 (1983), seeking damages, injunctive relief and a declaratory judgment as to who is responsible for the clean up of a certain tank containing coal tar sludge located on property sold to plaintiff by defendant. Jurisdiction is alleged under 42 U.S.C. § 1332 (1983) and is not in dispute.

This action is presently before the Court on defendant Reilly's motion to strike as immaterial those portions of plaintiff's amended complaint requesting declaratory judgment and injunction, and defendant's motion to dismiss the same for failure to state a claim for which relief may be granted. Defendant has also moved that plaintiff's request for damages be dismissed for failure to state a claim.

1. Defendant's Motion to Strike

Defendant's motion to strike may be disposed of at the outset without resort to extended argument. Fed. R. Civ. P. 12(f) provides that upon motion made by a party, the court may order stricken from any pleading any immaterial matter. Although the motion may be used to strike material from either party's pleading, it is used primarily for objecting to an insufficient defense. C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1380, at 782 (1969). "It is neither an authorized nor a proper way to procure the dismissal of all or a part of a complaint, . . ." Id. "[B]ecause striking a portion of a pleading is a drastic remedy and because it often is sought by the movant simply as a dilatory tactic, motions under Rule 12(f) are viewed with disfavor and are infrequently granted." Id. at 783."'Immaterial' matter is that which has no essential or important relationship to the claim for relief . . ." Id. § 1382, at 822.

Plaintiff's amended complaint is brought pursuant to CERCLA and Tennessee's Hazardous Waste Management Acts as part of its attempt to place responsibility for the disposal and clean up of the holding tank that is the subject of this lawsuit. CERCLA, 42 U.S.C. § 9607, establishes liability for the disposal of hazardous substances. Likewise, the Tennessee act regulates the disposal of hazardous wastes. See Tenn. Code Ann. § 68-46-102(1) (1983). It cannot be said that plaintiff's claims under these statutes have "no essential or important relationship to the claim for relief;" therefore, defendant's motion to strike is denied.

II. Defendant's Motion to dismiss

A. Plaintiff's claim for a declaratory judgment.

Defendant insists that plaintiff's request for a declaratory judgment under CERCLA and Tennessee's Hazardous Waste Management Acts as to who is responsible for disposal of the coal tar tank is invalid because of the exclusive administrative jurisdiction reposed in the state and federal agencies responsible for the enforcement of the Acts. Defendant further insists that plaintiff is, in essence, asking this court to render an advisory opinion to be directed to the Environmental Protection Agency (EPA).

The question to be decided, therefore, is whether plaintiff's request for a declaratory judgment is barred by exclusive administrative jurisdiction.

The standards for a Rule 12(b)(6) motion are well accepted. The complaint is to be construed in the light most favorable to plaintiff and its allegations are taken as true. C. Wright & A. Miller, supra, p. 2, § 1357, at 594. The question is whether, in the light most favorable to plaintiff and with every doubt resolved in its behalf, the complaint states any valid claim for relief. Id. at 601.

Title 28, U.S.C. § 2201 (1982) provides that in a case of actual controversy, a federal court may declare the rights and other legal relations of any party. "Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941). "The disagreement must not be nebulous or contingent but must have taken on fixed and final shape so that a court can see what legal issue it is deciding, . . ." Public Service Commission v. Wycoff Co., 344 U.S. 237, 244 (1952).

CERCLA, 42 U.S.C. § 9607, provides that any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of shall be liable for costs of response incurred by any other person. It has previously been held that this section gives a private party the right to recover its response costs from responsible third parties. See City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135, 1143 [12 ELR 20915] (E.D. Pa. 1982); Jones v. Inmont Corp., No. C-1-83-1202 [14 ELR 20485] (S.D. Ohio 1984). This court is likewise persuaded that the plain language of the statute provides plaintiff with the right to sue under section 9607. See infra pt. C.

Given that plaintiff has the right to seek liability from defendant, the question remains whether plaintiff's complaint alleges facts sufficient to present a real controversy such that a declaratory judgment action may lie. In Ohio v. Georgeoff, 562 F. Supp. 1300 [13 ELR 20457] (N.D. Ohio 1983), the court held that the allegation by the plaintiff that it had sustained damages of at least $825,000 in response costs represented such a real controversy. In the instant case, plaintiff Velsicol has alleged response costs. Although it remains to be determined whether plaintiff's alleged costs are in fact recoverable under CERCLA, the allegations are sufficient to thwart defendant's motion to dismiss plaintiff's claims for a declaratory judgment.

B. Plaintiff's Claim for Injunctive Relief.

Defendant argues as before, that a mandatory injunction under CERCLA directing clean up of the coal tar tank is precluded by exclusive administrative jurisdiction. Defendant basically is arguing that plaintiff lacks standing to bring such an action under the Act.

Plaintiff cites as authority for its position, Jones v. Inmont Corp., No. C-1-83-1202 [14 ELR 20485] (S.D. Ohio 1984). Plaintiff's reliance upon Inmont is misplaced. Although the Inmont court held that a private right of action exists under CERCLA, its holding was limited to recovery under the liability provision of the Act.

CERCLA, 42 U.S.C. § 9606 provides a procedure for the [15 ELR 20105] bringing of an action to abate an actual or threatened release of a hazardous substance from a facility. By its terms, the action is limited to one brought by the Attorney General of the United States at the request of the President. This Court is unaware of, and counsel for plaintiff has not directed the Court to, any other provision of the Act providing for an order such as the one plaintiff seeks.

In the absence of such a provision, this court is at a loss to find any basis for plaintiff's request for injunctive relief under CERCLA. Therefore, defendant's motion to dismiss plaintiff's claim for injunctive relief under CERCLA is granted.

C. Plaintiff's Claim for Damages for Response Costs.

Defendant asserts several reasons in support of its motion to dismiss plaintiff's claim for damages under CERCLA; each will be considered in turn.

First, defendant insists that plaintiff's denomination of monies, time and efforts expended in order to identify the problem and determine how the problem can best be allayed do not constitute response costs as defined in 42 U.S.C. § 9601(25). The issue, therefore, is whether investigative costs are response costs under CERCLA.

CERCLA, 42 U.S.C. § 9601(25) defines "response" as "remove, removal, remedy, and remedial action." "Costs of response" then obviously refers to the costs of removal and remedial action. It is difficult to see how costs of identifying and determining how to allay the environmental problem presented by the coal tar tank are not subsumed within the definition of eresponse costs.

In United States v. Price, No. 80-4104, 19 ERC 1638 [13 ELR 20843] (D.N.J. 1983), the court granted defendant's motion for a summary judgment as to the government's naked claim for "response costs." The court based its ruling on the fact that although "[o]ther costs may have been incurred during the investigatory stages, or in producing the feasibility study . . ., the government has failed to specify such grounds as a basis for this lawsuit." Id. 19 ERC at 1644. By contrast, plaintiff Velsicol has adequately identified its costs in its amended complaint.

This Court is not convinced that investigative costs are not response costs as defined by CERCLA, especially in the context of this lawsuit. The purpose of CERCLA is "to facilitate the prompt clean up of hazardous dumpsites by providing a means of financing both governmental and private responses and by placing the ultimate financial burden upon those responsible for the danger." City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135, 1142-43 [12 ELR 20915] (E.D. Pa. 1982). Should Velsicol succeed in its attempt to place responsibility for the coal tar tank on defendant, it should be able to recover any costs spent in remedying the problem, including investigative costs.

Second, defendant insists that plaintiff's failure to allege that there has been a release or threat of release of a hazardous substance defeats its claim for response costs. Without deciding whether such an allegation is necessary to a claim for response costs, this court is convinced that plaintiff's complaint satisfactorily alleges a threat of release under the liberal pleading requirements of the federal rules. As stated before the complaint must be construed in the light most favorable to the plaintiff and all doubts must be resolved in plaintiff's favor. C. Wright & A. Miller, supra, p. 2, § 1357, at 601.

Plaintiff alleges in its amended complaint that the EPA has advised that the coal tar may reasonably be anticipated to pose a danger to the environment. For the purposes of a motion to dismiss, this court is willing to accept that the threat of release of a hazardous substance is inherent within that allegation. Defendant continues to assert other argument in support of its position that plaintiff cannot establish a present danger of release of a hazardous substance. At this point in the progression of this lawsuit, it is sufficient to note that whether plaintiff will prevail is a matter properly determined on the basis of proof and not merely on the pleadings. Plaintiff has sufficiently satisfied the requirement of Fed. R. Civ. P. 8 that a complaint need only set out a generalized statement of facts from which defendant will be able to frame a responsive pleading.

Third, defendant insists that plaintiff's claim for response costs is invalid because plaintiff's complaint establishes that the coal tar was not disposed of on defendant Reilly's property as required by section 9607(a).

CERCLA, 42 U.S.C. § 9601(29), provides that "disposal" shall have the meaning provided in section 1004 of the Solid Waste Disposal Act, 42 U.S.C. § 6903 (1983). That section states that "disposal" means the "discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any consituent thereof may enter the environment . . ." 42 U.S.C. § 6903(3). Defendant insists that plaintiff's allegation that the coal tar is contained in a concrete cistern with a wooden cover establishes that the hazardous substance cannot enter the environment. The court can only reply that it is not prepared to rule as a matter of law that the existence of the concrete contained conclusively precludes a finding of "disposal." Again, this argument is more properly determined on the basis of proof.

Finally, defendant insists that plaintiff is not a proper party to bring a private cause under section 9607. Section 9607 provides that the owner of a facility as well as any person who at the time of disposal of a hazardous substance owned a facility at which such hazardous substance was disposed of shall be liable for necessary costs of response incurred by any other person. Plaintiff, as the present owner of the facility in question, satisfies the definition of a liable party. Defendant insists that "any other person" must refer to persons other than those made liable under the Act.

The reference to "any other party" is found in subsection (B) of section 9607(4). Subsection (A) refers to the United States or a State as proper plaintiffs. A fair reading of the section leads this Court to the conclusion that "any other person" means any other person other than the United States or a State.

The precise issue raised here was resolved against defendant Reilly's position in City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135 [12 ELR 20915] (E.D. Pa. 1982). There the defendant had allegedly dumped hazardous wastes at a landfill owned by the City. The city had undertaken the clean up and was seeking recovery of its costs from defendant under section 9607. Defendant insisted, as does Reilly here, that since the City was potentially liable under the Act as the owner of the dumping site, it could not satisfy the definition of "any other person."

In a well-reasoned opinion backed by a survey of the legislative history the court concluded that:

Viewing the statute in this context, I cannot attribute to Congress an intention to preclude the city from maintaining a CERCLA action in this case. While the City is admittedly the owner of the Enterprise site, and might have been liable to the federal or state governments had those entities commenced the clean up, the dispositive consideration is that the City did not operate a hazardous waste disposal facility on the premises and it asserts that it did not voluntarily permit the placement of the hazardous substances on its property. Moreover, it has undertaken to clean up the ensuing damage and now seeks to recover its response costs from parties which were allegedly involved in the illegal dumping and which are made expressly liable for response costs. I cannot conclude that the City's right to maintain this action is barred by the hypothetical possibility that had the federal or state government brought this suit, the City too would be liable. The parade of horrors posited by defendants does not counsel against such a result. The simple fact is that there has been no expenditure of superfund monies nor have the federal or state governments commenced an action against the City or anyone else. Rather, a party which has incurred response costs seeks to recover them from responsible parties, an action expressly authorized by CERCLA. This action is not barred because of some theoretical inconsistencies with statutory provisions which have not been made operative in this case.

Id. at 1143.

Defendant attempts to distinguish Stepan on the grounds that Velsicol knowingly and voluntarily, and for commercial advantage, took control of the coal tar tank. Besides the fact that this allegation is disputed by Velsicol, plaintiff is correct in insisting that the dispositive consideration in Stepan was that the plaintiff [15 ELR 20106] City "did not operate a hazardous waste disposal facility on the premises and it asserts that it did not voluntarily permit the placement of the hazardous substances on its property." Id. As the plaintiff's pleadings in the instant case cannot possibly be construed to establish that Velsicol operated a hazardous waste disposal facility or that it voluntarily permitted the placement of the coal tar on the property, defendant's argument must fail.

In summary, the Court concludes the following:

(1) That plaintiff's claims under CERCLA and Tennessee's Hazardous Waste Management Acts are not immaterial to its claim for relief;

(2) That plaintiff is a proper party to bring a suit against defendant under CERCLA and that its claim for response costs represents a sufficiently real controversy to support a request for declaratory judgment;

(3) That CERCLA provides no basis for a request for injunctive relief;

(4) That investigative costs are response costs, as defined in CERCLA;

(5) That plaintiff's complaint sufficiently alleges a threat of release under CERCLA to satisfy the federal pleading rules;

(6) That the fact that the coal tar is alleged to be contained in a concrete cistern does not prevent a finding of "disposal" under CERCLA as a matter of law; and

(7) That potential liability under CERCLA does not prevent plaintiff from seeking liability from defendant.

For these reasons, the Court is of the opinion that defendant's motion to strike should be overruled, and defendant's motion to dismiss should be overruled except for that portion of the motion which seeks to dismiss plaintiff's claim for injunctive relief which should be granted.

An appropriate order will enter.

Order

In accordance with the memorandum opinion filed simultaneously herewith, it is ORDERED as follows:

(1) That defendant's motion to strike is overruled;

(2) That defendant's motion to dismiss is overruled except for that portion of said motion which seeks to dismiss plaintiff's claim for injunctive relief; and

(3) That the portion of defendant's motion which seeks to dismiss plaintiff's claim for injunctive relief is sustained.