Mayor of Boonton v. Drew Chemical Corp.

No. 83-4761 (D.N.J. July 24, 1985)

The court rules that a municipality may be a "state" for purposes of recovery under § 107(a)(4)(A) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and that CERCLA authorizes recovery of response costs incurred before the Act became law. The court first rules that municipalities may recover under § 107(a)(4)(A). The definition of "state" is not expressly limited to states and should be interpreted broadly where necessary to accomplish the remedial purposes of the Act. Section 107(f) authorizes recovery of damages to natural resources of the United States or a state, but also defines those resources to include those controlled by local governments. Even if § 107(f) were to be narrowly construed, it also authorizes recovery of natural resource damages by "authorized representatives" of states. As to whether the town of Boonton is an authorized representative, the court finds it significant, but not controlling, that New Jersey law requires the powers of municipalities to be construed broadly to accomplish their responsibilities. The court holds that the town was an authorized representative with regard to cleanup actions taken after passage of CERCLA, because the town was carrying out instructions of the state Department of Environmental Protection.

The court also rules that plaintiffs can seek to recover response costs incurred prior to enactment of CERCLA. It is established that CERCLA imposes liability for waste disposal predating the Act. Though courts have split on whether preenactment costs may be recovered, the court finds more persuasive those decisions allowing recovery. The requirement that costs be consistent with the national contingency plan concerns the nature of the response, not its timing. The express prohibition on recovery of preenactment natural resource damages implies that Congress did not intend to preclude recovery of preenactment response costs, because those provisions contain no such bar.

Counsel for Plaintiffs
Joseph J. Maraziti Jr.
Maraziti, Falcon & Gregory
65 Madison Ave., Morristown NJ 07960
(201) 538-1212

Counsel for Defendants
Edward F. Lamb
Robinson, Wayne, Levin, Riccio & LaSala
Gateway 1, Newark NJ 07102
(201) 621-7900

[15 ELR 20963]

Ackerman, J.:

Opinion

THE COURT: Well, as the parties are aware, this case under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (CERCLA) was before me on defendant's motion for summary judgment on June 24, 1985. At that time a portion of the defendant's motion was continued to this date to permit plaintiff an opportunity to respond to two important arguments raised by defendant for the first time in its reply brief to this Court. In particular, the issues, which, in my judgment, are important are presently before me today are (1) whether a municipality, such as plaintiff, is a "state" for the the purposes of recovery under Section 9607(a)(4)(A), or (c) of CERCLA, and (2) whether the plaintiff can recover for response costs incurred prior to December 11, 1980, the effective date of CERCLA.

I incorporate by reference the description of the facts and the governing provisions of CERCLA as well as the basic standard to be applied in a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure as set forth in my oral ruling when we were here last. I turn now to the issues which remain to be decided by this Court.

As to the first question, in support of its motion, defendant points to the language of Section 9607(a)(4)(A), which imposes liability for "all costs of removal or remedial action incurred by the United States Government or a state not inconsistent with the national contingency plan."

Defendant further points to Section 9007(f) which modified Section 9607(a)(4)(C) providing for liability for injury destruction or loss of natural resources as follows: "In the case of an injury to, destruction of, or loss of natural resources under subparagraph (c) or subsection (a) of this section, liability shall be to the United States Government and to any state for natural resources within the state or belonging to, managed by, controlled by or appertaining to such state . . . ." See 42 U.S.C. Section 9607(f).

In arguing that the Mayor and Board and Aldermen of the Town of Boonton are not the state for the purpose of recovery under the above provisions of CERCLA, defendants contend that in the definitional section of the Act, the terms "United States" and "state" are defined as "the several states of the United States, the District of Columbia, the Commonwealth of Puerto Rico, . . . and any other territory or possession over which the United States has jurisdiction." See 42 U.S.C. Section 9601(27).

In further support of its argument, defendant contends that because Congress specifically referred to "states or political subdivisions" in Section 9604(d) of the Act, it must have intended to exclude municipalities where no reference to political subdivisions was made in the Act.

I am not persuaded by these arguments. First, as plaintiff correctly points out, the Act nowhere provides that the term "state" means the several states but instead specifically, and I believe significantly states that the term "state" shall "include" the entities listed in Section 9601(27). (Emphasis supplied.) The definitional section therefore explicitly contemplates, I find, an expansion of this list by the courts where to do so would be consistent with the remedial intent of the act.

Further, while Section 9607(f) limits liability for loss of natural resources to the United States or a state"for natural resources within the state or belonging to, managed by, controlled by, or appertaining to such state," the term "natural resources" is defined to explicitly include such resources "belonging to, managed by, hled in trust by, appertaining to, or otherwise controlled by the United States . . . (or) any state or local government." 42 U.S.C. Section 9601(16). (Emphasis supplied.) Moreover, as I noted in my June 24 ruling, CERCLA should be given a broad and liberal construction. See, for example, U.S. v. Reilly Tar & Chemical Corp., 546 F. Supp. 1100 and 1112 [15 ELR 20348] (D. Minn. 1985).

In addition, although defendant correctly quotes the selected portion of 9607(f) stating that liability shall be to the United States or to a state, it fails to quote the portion of subdivision (f) which states: "The President or the authorized representative of any state, shall act on behalf of the public as trustee of such natural resources to recover for such damage." See 42 U.S.C. Section 9607(f). (Emphasis added.)

The Act does not define the term "authorized representative," and plaintiff reasons that state law may provide some guidance to a federal court seeking to determine whether a municipality could be construed as an authorized representative of the state under appropriate circumstances. Plaintiff cited to Article 4 Section 7 Paragraph 11 of the New Jersey Constitution requiring all laws respecting the powers of municipal corporations to be liberally construed in their favor and to the New Jersey Home Rule Act, N.J.S.A. 40: 42-1 at Section 4 stating that "all courts shall construe (its provisions) . . . most favorable to municipalities, it being the intention to give all muncipalities to which this subtitle applies the fullest and most complete powers possible over the internal affairs of such municipalities for local self government."

While I'm not convinced that Congress intended state law to govern the question of who or what is an "authorized representative" under CERCLA, I find those state law provisions cited by plaintiff to be of some value in my determination in this regard. And it is certainly conceivable that Congress was cognizant that the states, and other entities would in the final analysis be partially burdened with enforcement of its provisions.

I note as well that Pope Field, the subject of this lawsuit, is owned by the Town of Boonton and may, therefore, be considered a matter of local concern within the scope of the state statute. Finally, I note that in this case the facts reveal that all post-CERCLA costs were clearly incurred by the town acting on the direction of the New Jersey Department of Environmental Protection and thus, I find, as an authorized representative of the state to this extent.

On the basis of the foregoing, I find that either by liberally construing the language of CERCLA in light of its broad remedial purposes or by specifically construing Section 9607(f) in light of state law giving municipalities broad powers, a municipality is a state or authorized representative thereof for the purposes of invoking the provisions of CERCLA.

Further, even if under this reasoning a municipality is not a state in every case, the Town of Boonton may clearly recover for the costs incurred by direction of the state in this case. Only that such a construction of this Act is consistent with its purpose to encourage and facilitate the clean up and treatment of hazardous wastes in order to protect and preserve natural resources and the public health.

Before turning to the second issue, I pause to note that while I had reservations as to the true plaintiffs in this action, Mr. Maraziti has educated me this morning that the muncipality's name is as depicted in the complaint. And, therefore, while I had intended to direct the plaintiff to amend its complaint pursuant to Rule 15 of the Federal Rules of Civil Procedure, that will now not be necessary.

Let me turn now to the significant question of what response costs may be recovered under CERCLA. It is undisputed that the directive date of CERCLA was December 11, 1980. See 42 U.S.C. Section 9652(a). The question of the retroactivity of CERCLA has involved the court in two issues. First, does CERCLA provide liability for response costs incurred with regard to pre-CERCLA acts, and second, if so, does CERCLA provide for liability of costs incurred pre-CERCLA or only for costs incurred post-CERCLA albeit for pre-CERCLA acts. Since the facts in this case indicate that all of the acts of dumping covered by CERCLA were performed prior to December 11, 1980. However, it appears that some of the response costs incurred by the Town of Boonton were incurred prior to that date. Both issues are, therefore, before this Court.

As to the first, defendant does not dispute and courts have universally held that CERCLA provides liability for acts within its scope but prior to its effective date. See U.S. v. Shell Oil Company, it was just decided this March, I don't have a F. Supp. citation. But I've been given the citation, 15 ELR 20337 at 20340. At least that's the cite I had on the decision which I read. Was decided by Judge Carrigan in the District of Colorado, as I said, March of this year. As well as on that point as well, see also U.S. v. Northeastern Pharmaceutical & Chemical Co., 579 F. Supp. 823, 839 [14 ELR 20212] (W.D. Mo. 1984) (and cases cited therein).

Courts have divided, however, over the question of whether CERCLA is retroactive to the extent that costs incurred prior to [15 ELR 20964] December 11, 1980, are recoverable under the Act. Compare Shell Oil cited supra at page 20340 holding that pre-CERCLA costs are recoverable with Northeastern Pharmaceutical cited supra at page 843. Although I am cognizant that there is a presumption against retroactivity which may only be overridden if retroactivity "be 'the unequivocal and inflexible import of the terms (of the statute), and the manifest intention of the legislature,'" U.S. v. Security Industrial Bank, 459 U.S. 70, 79 (1983) quoting from the Union Pacific Railway v. Laramie Stock Yards Co., 231 U.S. 190 at 199 (1913), I've omitted the citations. I am, nevertheless, persuaded that Congress intended all costs, including those incurred before the effective date of the Act, to be recovered under CERCLA. I base my conclusion in this regard on the exhaustive analysis of this issue by Judge Carrigan in the Shell Oil case. Judge Carrigan concluded, as I have, "that the unavoidably retroactive nature of CERCLA, and Congress' decision in CERCLA to impose costs of cleaning up hazardous waste sites on the responsible parties rather than on taxpayers, strongly indicate Congressional intent to hold responsible parties liable for pre-enactment government response costs." See Shell Oil at page 20340.

I agree with the Court in Shell Oil that where there is evidence that a statute was "rushed throuh a lame duck session of Congress," see State of Ohio ex rel. Brown v. Georgeoff, 562 F. Supp. 1300 at 1310, footnote 12 [13 ELR 20457] (N.D. Ohio 1983), the directly conflicting verb tenses of the liability provision in effect "cancel each other" and ought not to be considered dispositive on the question of retroactivity. See Shell Oil once again at page 20340, discussing 42 U.S.C. Section 9607(a)(4). I, therefore, cannot believe that the case of Summers v. Sking A/E Kyken, 191 F. Supp. at 929 at 930 (S.D. Pa.) affirmed per curiam, 296 F.2d 548 (3d Cir. 1961) is controlling on the issue before me.

Similarly, I am persuaded by Judge Carrigan's analysis that the requirement in the Act that costs be consistent with the National Contingency Plan (NCP) in no way precludes the conclusion that the Act was intended to provide for recovery of pre-CERCLA costs incurred. Regardless of whether the original or revised NCP is utilized for this determination, I agree with the Colorado court that "nothing prevents . . . recovery of costs later determined to be consistent with the NCP. The consistency requirement addresses the nature of the response action for which costs can be recovered not the timing of the action." See page 20340 of that opinion.

Further, I agree that "Congress implicitly authorized retroactive application of section 107(a)(4)(A) and (B) by affirmatively limiting retroactive application of the third category of liability damages to natural resources," Section 107(a)(4)(C).

It is true, as Judge Carrigan notes, that at least two courts have felt constrained to find against retroactivity on this point because of the absence of a clear alternative statement in the Act. See, for example, Northeastern Pharmaceutical, 579 F. Supp. at 842, as well as U.S. v. Wade, 577 F. Supp. 1326 [14 ELR 20096] (E.D. Pa. 1983). However, as recently as 1983, as noted supra, the Supreme Court required only that the unequivocal and inflexible import of the statute and the manifest intention of Congress in favor of retroactivity be shown. See Security Industrial, 459 U.S. at Page 79. I've omitted the citations.

There is no requirement that retroactivity be expressly provided for in the Act. Here, I find that the clear unequivocal thrust of CERCLA by its terms and by the legislative history discussed in the Shell Oil case is to provide for retroactivity in all respects that do not offend basic constitutional principles of fairness and due process. No party has argued, nor do I find, any such principles offended by the retroactive application of CERCLA to costs incurred prior to the Act's effective date. I, therefore, find that such response costs may be recovered by plaintiff herein.

In sum then I note that this Court is not unaware of the importance of the issues called herein. And my heavy reliance on Judge Carrigan's opinion should not be construed as an abdication of the responsibility of this Court to consider the issues raised anew. Instead, I have carefully reviewed the statute, the legislative history and the case law land I don't believe I can improve on Judge Carrigan's reasoning in what I consider to be a very learned opinion.

I do not in any way, nor could I, denigrate the reasoning employed in Northeastern or by my learned colleague Judge Newcomer in the Wade case. I part company to the extent that I have from those two opinions. I have concluded that pre-CERCLA response costs are recoverable and that they may be recovered by the plaintiff herein if all other issues of fact are resolved in plaintiff's favor with the sole exception set forth in Section 9607(f) regarding claims under 9607(a)(4)(C).

The continued portion of defendant's summary judgment motion is denied.