Earthline Co. v. Kin-Buc Inc.

No. 83-4226 (D.N.J. April 13, 1984)

The court holds that classification of plaintiffs as "operators" of the Kin-Buc Landfill in Edison, New Jersey, or "transporters" of hazardous substances to the site must not delay implementation of a cleanup order issued under § 106 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Since plaintiffs are liable for cleanup under CERCLA § 107(a)(4) as "transporters" of hazardous substances and, possibly as operators, and defendants are liable under CERCLA § 107(a)(2) as "owners or operators," the court declines to specify each party's liability prior to resolution of factual issues. It holds that under CERCLA § 107(a)(4)(B), plaintiffs and defendants must bear abatement and cleanup costs alike. Exercising its broad equitable powers of relief in view of the imminent threat to the public posed by the site, the court denies cross motions for injunctive relief with regard to the performance of ordered cleanup activities. The court holds that until evidentiary hearings are held to determine the nature and extent of each party's liability, plaintiffs and defendants must share equally the costs of cleanup, as directed by the EPA in its § 106 order. The court also orders the parties to submit a schedule allocating tasks to be performed by each in order to facilitate cleanup and abatement of hazardous substance pollution at the Landfill.

Counsel for Plaintiffs
David M. Jones
Berman Engle P.C.
36th Floor, One Boston Place, Boston MA 02108
(617) 720-0300

Dennis M. Reznick
Budd, Larner, Kent, Gross, Picillo & Rosenbaum
33 Washington St., Newark NJ 07102
(201) 622-7400

Counsel for Defendants
Edward J. Egan
1703 East 2nd St., Scotch Plains NJ 07076
(201) 322-5924

Benjamin Weiner
Weiner & Hendler
303 George St., New Brunswick NJ 08903
(201) 846-3100

Lorraine S. Gerson, Ass't U.S. Attorney
970 Broad St., Newark NJ 07102
(201) 645-6438

[15 ELR 20314]

Fisher, J.:

Full Text of Opinion

Plaintiffs, Earthline Company (Earthline), SCA Services of Passaic Inc. (SCA Passaic) and SCA Services Inc. (SCA Services) have come before this Court seeking an order pursuant to Rule 65 of the Federal Rules of Civil Procedure preliminarily enjoining defendant Kin-Buc Inc. (Kin-Buc) from discharging aqueous materials from Pool C or the Pool C area of the Kin-Buc Landfill (Landfill) into the environment. Defendants Kin-Buc, Scientific, Inc., Wastequid, Inc., Filcrest Realty, Inc., and Inmar Associates, Inc. (collectively, the Kin-Buc defendants) have cross-moved for an order enjoining plaintiffs from making any such discharge of aqueous materials. For the reasons set forth below, the motion of plaintiff and the cross-motion of defendants are denied. This Court, in the exercise of its equity jurisdiction, has fashioned the relief set forth below.

I. Factual Background

Plaintiff instituted this action for a declaratory judgment on November 2, 1983, seeking to clarify the rights and obligations of the parties under an administrative order issued by the United States Environmental Protection Agency (EPA) requiring the performance of certain tasks intended to accomplish the clean-up and closure of the Landfill, which is located in Edison, New Jersey.

On September 23, 1984, the EPA issued certain "Findings of Fact, Determination and Order" concerning the Kin-Buc Landfill, pursuant to Section 106 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq. (CERCLA) (the Order). The Order applies to and is binding on the eleven individuals and corporations named jointly and severally as respondents.¹ After extensive factual findings² concerning the roles played by the various parties in the operation of the Landfill as a solid and liquid waste disposal site until its shutdown in 1977, the Order set forth certain enumerated tasks to be performed to effectuate the clean-up of the Landfill. Immediately upon the effective date of the Order, October 7, 1983, the respondents were required to perform:

(1) The collection and containment of the oily phase of waste materials located at the area known as Pool C (the "scooping operation") (Order, Paragraph 24);

(2) The inventory and removal of drummed waste materials located on the site. (Order, Paragraphs 28-30);

(3) The preparation of a remedial investigation of the Landfill site and a feasibility study of alternative permanent remedial actions (Order, Paragraph 33); and

(4) The cessation of aqueous discharges from Pool C to tehe environment within 180 days of the Order, i.e. by April 3, 1984 (Order, Paragraph 32).

In the Order, the EPA did not specifically assign certain clean-up tasks to each respondent. Instead, it merely provided that each of the respondents was responsible for performing every task. The present action for a declaratory judgment is the result of the parties' inability to come to an agreement as to the distribution of tasks and responsibilities set forth in the Order.

The EPA mandated that each respondent was to notify the agency in writing within three days of its intent to comply with the terms of its Order. On October 12, 1983 the plaintiffs advised the EPA of their intent to comply, subject to the reservation of certain rights. No such notice was submitted by the defendants or other respondents to the Order. The intent of plaintiffs in advising the EPA that they would comply is one of the many disputed issues in this controversy. Defendants assert that they understood this to mean that plaintiffs would assume full responsibility for the clean-up of the Landfill. Consequently, defendant Kin-Buc stated that it would cease the scooping operation which it had been performing since September 1982.³ Plaintiffs, however, counter that it was their intent only to comply with the EPA's directive of responding to the Order, and not to undertake the entire clean-up operation on their own. Plaintiffs subsequently moved before this Court in November 1983, for the same relief requested in the present motion, namely, to require defendant Kin-Buc to continue its scooping operations and to require that the discharge of acqueous materials into the environment be stopped. At the hearing on that motion, counsel for Kin-Buc represented to the Court that Kin-Buc would in fact continue the scooping operation until such time as the parties could reach an agreement as to their responsibilities for the Landfill clean-up.

It has become apparent from the proceedings thus far that the parties in this action are incapable of reaching an amicable resolution to this dispute. The progress of the clean-up activities at the Landfill site remains the subject of much disagreement, both with respect to which tasks each respondent has performed to date, and what still must be done in order to comply with the EPA directive. The proofs submitted also conflict on these points. What is clear, however, is that the EPA has indicated that is will invoke the civil penalties and/or treble damages provision of CERCLA⁴ if the terms of the Order were not complied with by respondents. Because the parties apparently believed that certain actions of the others presented a barrier to timely compliance with the Order, the Court is now presented with these cross-motions for injunctive relief.

II. CERCLA

Provisions for the abatement and clean-up of hazardous substances under federal law are set forth in CERCLA. The remedies provided in CERCLA are to be applied "(i)n addition to any other action by a State or local government", 42 U.S.C. Section 9606(a). The findings of fact submitted by the EPA in its Order pursuant to CERCLA show that plaintiff Earthline was a transporter of liquid wastes to the Landfill site for disposal during a nine-month period in 1975-76. (Order, Paragraph 9). SCA Passaic is one of the two 50/50 partners in Earthline, and SCA Services is the corporate parent of SCA Passaic (Order, Paragraph 2(I), (J), (K)). These findings by the EPA are not contested by the parties. The EPA also specifically found that "from approximately 1968 to March 1977, Kin-Buc operated the Landfill and utilized the Landfill for the disposal of solid and liquid domestic and commercial wastes . . ." (Order, Paragraph 4). During this period, the Landfill and the real property on which it was located was "owned by one or more subsidiaries of Scientific, including Kin-Buc and Filcrest or by Inmar." (Order, Paragraph 5). In addition, Wastequid, through Earthline, was found to be "instrumental in collection of liquid wastes, including wastes containing hazardous substances, and the transportation of those wastes to the Landfill for disposal. (Order, Paragraph 9). All of [15 ELR 20315] These findings concerning the relationship of the defendants to the Landfill are also undisputed by the parties. The sole issue in dispute then, is whether the plaintiffs' involvement with the Landfill was of such an extent and nature as to classify them as "operators" of the Landfill rather than merely "transporters" of hazardous substances to the Landfill site. At this time, and for the purpose of determining liability under CERCLA, however, that muchdisputed question is not relevant.

There are four classes of individuals who are covered by and liable under Section 107(a) of CERCLA:

(1) the owner and operator of a vessel (otherwise subject to the jurisdiction of the United States) of a facility;

(2) 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;

(3) any person who by contract, agreement or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility owned or operated by another party or entity and containing such hazardous substances, and

(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance. 42 U.S.C. Section 9607(a).

The undisputed findings of the EPA clearly show that under Section 107(a)(2) defendants Kin-Buc, Inmar, Filcrest and Scientific are within CERCLA's scope as owners or operators of the Landfill. Plaintiff Earthline falls within the scope of Section 107(a)(4) as a transporter of hazardous substances to the Landfill, as does defendant Wastequid.

Parties covered by CERCLA are liable under Section 107(a) for:

(A) all costs of removal or remedial action incurred by the United States Government or a State not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan; and

(C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release.

The United States has not yet taken any action with respect to clean-up of the Landfills so that the liability provisions of (A) above are not applicable at present.⁵ The parties in this case are liable under (B), however, for costs of response⁶ incurred by a person other than the federal government. This provision of CERCLA therefore requires that the abatement and clean-up costs of the Landfill be borne by plaintiffs and defendants alike.

It is a basic tenet that a federal court sitting in equity possesses broad discretion characterized by "flexibility, the need for practicality, and the duty to reconcile the public interest with private needs." Harjo v. Andrus, 581 F.2d 949, 952 (D.C. Cir. 1978). See also Hecht Co. v. Bowles, 321 U.S. 321, 329-30 (1944). As a result, a court of equity has the power to tailor the relief so as to remedy the harms demonstrated. Harjo v. Andrus, 581 F.2d at 952.

In addition, Section 9606(a) of CERCLA specifically provides that where there may be an "imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance . . . the District Court of the United States in the district in which the threat occurs shall have jurisdiction to grant such relief as the public interest and the equities of the case may require." 42 U.S.C. Section 9606(a).

In view of the broad powers of relief given to this Court, and especially in view of the imminent threat which the Landfill in its present state poses to the public interest, I find it appropriate to deny the motion of plaintiff and cross-motion of defendant.⁷ Instead the parties are directed to perform the following:

(1) Each side shall equally share the costs of clean-up as directed by the EPA until the Court decides the nature and extent of each party's liability. Thus, 50 percent of the costs shall be borne by the plaintiffs jointly and 50 percent of the costs shall be borne by the defendants jointly (excluding the EPA).

(2) The parties shall submit to the Court within 14 days a schedule detailing the tasks to be performed and the responsibilities to be assumed by the respective parties in order that the clean-up and abatement of hazardous substances at the Landfill be completed in accordance with the directives of the EPA.

III. Conclusion

There has been no dispute about the liability of all parties for clean-up costs under CERCLA. The contested question throughout has been the status of Earthline as a "transporter" or an "operator" of the Landfill. The Court has been deluged with conflicting proofs on this issue, an issue which is pertinent to the potential liability of Earthline under New Jersey Law. It is clear that an evidentiary hearing is required in order to make the proper factual findings to resolve this issue. Such a determination, as well as the questions of primary and secondary liability lies at the heart of this action for a declaratory judgment as to the rights and obligations of the parties under the Order.

Accordingly, plaintiffs' motion and defendants' cross-motion for injunctive relief are denied. All parties are directed to perform the duties set forth in Part II of this opinion.

Order

This matter being before the court on applications of both sides for preliminary injunctions with regard to discharge of aqueous materials, and the court having heard oral argument and considered the briefs submitted by all parties, it is, on the 16th day of April, 1984,

ORDERED that the motion of plaintiffs and cross motion of defendants are denied, and the parties are directed to perform the following:

1. Each side shall equally share the costs of clean-up as directed by the EPA until the court determines the nature and extent of each party's liability. Thus, 50 percent of the costs shall be borne by the plaintiffs jointly and 50 percent of the costs shall be borne by the defendants jointly (excluding the EPA).

2. The parties shall submit to the court within 14 days a schedule detailing the tasks to be performed and the responsibilities to be assumed by the respective parties in order that the clean-up and abatement of hazardous substances at the landfill be completed in accordance with the directives of the EPA.

1. Named as respondents in the EPA Order were the three plaintiffs in this action, the Kin-Buc defendants, and defendants Mahan and Meagher. Also named as a respondent by the EPA was Anthony Gaess, who was a principal operating officer of Earthline at the time the Landfill was used for the disposal of hazardous substances (Order, 2(L)). Mr. Gaess is not a party to the present action.

2. The EPA's findings are not binding on this Court. At a subsequent date when an evidentiary hearing is conducted, the Court will sift through the many pages of conflicting proofs presented in this case and arrive at its own findings of fact.

3. The scooping operation was initially begun by the EPA in February 1980, but was taken over in September 1982 by Kin-Buc.

4. Section 106(b) of CERCLA, 42 U.S.C. Section 9606(b) imposes a fine of up to $50000 per day for as long as a respondent's willful violation or refusal to comply with CERCLA continues. In addition, Section 107(c)(3) provides for punitive damages of up to three times the amount of federal funds expended due to the failure of a person liable under CERCLA to provide for adequate removal of the hazardous material. 42 U.S.C. Section 9607(c)(3).

5. As noted above, the EPA has indicated its intent to invoke the penalty provisions of CERCLA should the parties' failure to comply voluntarily with the Order result in an expenditure of federal funds for the Landfill cleanup.

6. "Response" is defined to mean such actions as are necessary to effectuate the cleanup or removal of released hazardous substances from the environment, including actions consistent with permanent remedy of the problem. 42 U.S.C. Section 9601 (23-25).

7. The interests of all parties to this action have also been considered in my decision, in view of the possible imposition of substantial penalties if the federal government is required to act for the parties in cleaning up the Landfill site. In short, the court is attempting to apply equitable principles to save the squabbling parties from themselves.