United States v. Mirabile

No. 84-2280 (E.D. Pa. September 4, 1985)

Ruling on motions for partial summary judgment on liability, the court holds that buyers of a hazardous waste site who did not allow further waste to be disposed of and who took steps to avoid further releases could be insulated from Comprehensive Environmental Response, Compensation, and Liability Act § 107 liability under the § 107(b)(3) affirmative defense. The court first holds that the buyers are potentially liable parties under § 107. They are the owners of the property. The United States has incurred response costs there. There was a release or a threatened release of hazardous substances, and the site qualifies as a facility. The court rejects defendants' argument that it should reserve judgment on liability until it determines whether damages may be apportioned. The court will address apportionment when it tackles the larger issue of damages. Finally, the court considers whether the affirmative defense of § 107(b)(3) could apply. The court finds no evidence suggesting that defendants added to the waste on the site or had any employment, agency, or contractual connection with the site's past operators. The court notes that defendants contend that they exercised due care under the circumstances to avoid releases by consolidating drums containing the waste in a secure warehouse. Although defendants' evidence is not uncontroverted and so does not meet the burden of proving the defense on summary judgment, it does raise genuine issues of fact that need to be resolved at trial. Despite uncontroverted evidence that releases occurred or threatened to occur while defendants owned the property, the court holds that it does not follow that defendants' acts or omissions caused the releases, noting that the § 107(b)(3) affirmative defense is the only part of § 107 that invokes principles of causation.

Counsel for Plaintiffs
Steven V. Englemyer, Ass't U.S. Attorney
3310 U.S. Courthouse, 601 Market St., Philadelphia PA 19106
(215) 597-2556

Counsel for Defendants
Robert Faron
Lane & Mittendorf
1750 K St. NW, Washington DC 20006
(202) 785-4949

Thomas R. Kline
Brown, Roady, Bonvillian & Gold
Suite 300, 1300 19th St. NW, Washington DC 20036
(202) 331-9420

[15 ELR 20992]

Newcomer, J.:

Memorandum

In this action, the United States seeks to recover its costs incurred in the removal of hazardous wastes from property presently owned by defendants Anna and Thomas Mirabile. Presently before me is the United States' motion for partial summary judgment as to liability. For reasons discussed below the motion will be denied.

The relevant background is as follows.¹ Prior to 1976, defendant Arthur C. Mangels Industries, Inc. (Mangels) owned the property (the "Turco site") on which the allegedly hazardous waste was located. Mangels engaged in the paint manufacturing business, and the waste stream generated by its operations, which was stored in drums, constitutes a portion of the waste at issue in this case. In 1976, defendant Turco Coatings, Inc. (Turco) commenced operations [15 ELR 20993] on the Turco site similar to those of its predecessor, Mangels. The waste stream generated by Turco, which was likewise stored in drums, also constiutes a portion of the waste at issue in this case.

Due to financial difficulties, Turco ceased its operations at the site in December of 1980. American Bank and Trust Company (ABT) foreclosed on the property in August of 1981. ABT successfully bid on the property at the Sheriff's sale, but subsequently assigned that bid to the Mirabiles. To this day, the Mirabiles hold title to the Turco site. The Mirabiles have not engaged in any activities resulting in an increase in the quantity of hazardous waste present at the site.

In the winter of 1981-1982, shortly after the Mirabiles acquired title to the property, the Pennsylvania Department of Environmental Resources (D.E.R.) informed Mr. Mirabile that drums on the property contained hazardous wastes and asked that he remove them. Mr. Mirabile undertook certain efforts to clean up the site. These efforts were apparently limited to a consolidation of drums, which had been scattered about the site, into a warehouse. Mr. Mirabile also obtained quotations from firms on the cost of removing the drums, but no drums were removed.

In February of 1983 Bruce Potoka, of the United States Environmental Protection Agency (EPA), visited the Turco site. He observed approximately 550 drums of waste from the manufacture of paint stored in a warehouse. (Potoka affidavit, P7; Exhibit H to United States motion.) Many of the drums were in a deteriorated condition, and the warehouse showed signs of the presence of trespassers. These signs included cigarette butts, beer cans, and the residue of fires. Based on these observations, together with air samples taken at that time, Mr. Potoka concluded that immediate removal actions were necessary.

On February 9, 1983, EPA authorized the use of Superfund money to conduct immediate action at the Turco site. The EPA provided the Mirabiles with a final, but brief, opportunity to clean up the site. The Mirabiles failed to respond to this last opportunity and on February 11, EPA commenced cleanup of the site. (Potoka affidavit, P9.)²

The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq. was enacted to facilitate prompt cleanup of hazardous waste dump sites and, when possible, to place the ultimate financial burden of cleanup upon those responsible for the danger created by such sites. The Act designates four categories of individuals subject to liability for cleanup costs, only two of which are relevant in this case: the present owner or operator of the site, § 9607(a)(1), and the owner or operator of the site at the time disposal occurred. § 9607(a)(2). The Act imposes strict liability. New York v. Shore Realty Corp., Docket No. 84-7925, Slip Op. at 13 [15 ELR 20358] (2d Cir. April 4, 1985); United States v. Northeastern Pharmaceutical & Chemical Company (NEPACCO), 579 F. Supp. 823, 844 [14 ELR 20212] (W.D. Mo. 1984). Such liability will be joint and several unless the defendants establish that apportionment is appropriate. United States v. A & F Materials Co., Inc., 578 F. Supp. 1249, 1253-1257 [14 ELR 20105] (S.D. Ill. 1984); United States v. Wade, 577 F. Supp. 1326, 1337-1339 [14 ELR 20096] (E.D. Pa. 1983).

To prevail in this case, the United States must establish:

1) the occurrence of a release or a threatened release;

2) of a hazardous substance;

3) from a facility;

4) presently owned or operated by the Mirabiles or owned or operated by them at the time of disposal; and

5) the incurrence of response costs.

42 U.S.C. § 9607(b).³ Certain of these elements are uncontested, and I will address them first.

The Mirabiles do not dispute that they are the present owners of the property. (Response of Mirabiles to plaintiff's Requests for Admissions (hereinafter "Admissions"), P1; Exhibit A to United States motion.) Thus, element (4) above is satisfied.⁴

The United States alleges it incurred $249,792.52 in its immediate removal action (Potoka affidavit, P11). The Mirabiles do not contest that the United States has incurred costs, but of course reserve the right to contest whether the costs incurred were "not inconsistent" with the national contingency paln. See § 9607(a)(1-4)(A). Element (5) is therefore satisfied.

I turn now to those matters which are in dispute. Because the issues raised with respect to elements (1) and (2) — whether there was a release or threatened release of a hazardous substance — are somewhat intertwined, I will consider them jointly.

The Mirabiles agree that EPA testing has revealed that the wastes found in drums on the site include benzene, ethylbenzene, napthalene, toluene, and mercury. (Admissions P9.) They further concede that these substances are hazardous substances within the meaning of CERCLA.⁵ 42 U.S.C. § 9601(14). (Admissions, PP5, 6, 8.)

The uncontroverted affidavits filed by the United States also establish the following. On February 11, 1981 D.E.R. officials visited the site and observed hundreds of drums in various stages of decomposition scattered about the site. The contents of some drums had leaked into the soil. (Holmes Affidavit, P7; Exhibit B to United States Response.) An inspection conducted on September 13, 1982 revealed that the drums which had previously been scattered about the site were now stored inside a warehouse. Many of the drums remained in a deteriorated condition. (Holmes Affidavit, P12.)

These undisputed facts appear to me to be sufficient to establish a release or a threatened release of a hazardous substance. Indeed, the precise nature of the Mirabiles' arguments to the contrary is unclear. Their first contention apparently is that liability may be imposed only if a release occurs that exceeds the ambient background of the environmental conditions at the site. Aside from the fact that I previously rejected this contention, see Wade, 577 F. Supp. at 1339-1341, is the fact that the United States need not establish a release at all. A "threatened release" is sufficient. § 9607(a)(4). The deteriorating condition of the drums constituted such a threat.

The Mirabiles also seem to question whether a release of anything at all has occurred. This contention was apparently based upon certain alleged ambiguities in the Potoka affidavit which have since been amply addressed by the Holmes affidavit, as outlined above.

Finally, the Mirabiles rely upon an expert affidavit of James Rogers to create an issue of fact. The Rogers affidavit takes issue with various contentions contained in the Potoka affidavit. For example, Mr. Rogers questions Potoka's conclusions that the site represented a significant threat of fire or explosion or that it warranted an immediate removal action. The significance of Mr. Rogers' conclusion are not clear to me.

If they are intended to undermine the United States's assertion that a release has occurred at the site, they plainly fail to do so. Leaching of wastes into the soil is sufficient; an explosion need not occur. United States v. Metate Asbestos Corp., 584 F. Supp. 1143 [14 ELR 20433] (D. Ariz. 1984); Wade, 577 F. Supp. at 1334.⁶ It appears the Rogers affidavit may be intended to create an issue of fact as to whether certain costs were incurred in a manner "not inconsistent" with the National Contingency Plan as is required by the statute. If this is the case, it can be adequately addressed at the damages phase of the trial. I find no genuine issue of material fact with respect to whether a release or threatened release of hazardous substances occurred at the site.

With respect to element (3), the statute defines a "facility" to include "any building, structure, installation . . . site or area where [15 ELR 20994] a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." § 9601(9). The Mirabiles' only apparent dispute with respect to this issue pertains to whether the site contained hazardous substances. Given my conclusion above that hazardous substances were stored at the Turco site, I must also conclude site was a "facility" within the meaning of the Act.

Thus, the United States has established that no genuine issue of material fact exists with respect to the elements it must prove. Nevertheless, the Mirabiles raise two additional arguments against the entry of summary judgment.

The Mirabiles' first contention is that summary judgment as to liability should not be entered until the court has determined whether apportionment is appropriate or feasible. The issue of apportionment is, in my view, one readily considered in the context of evidence on damages. The fact that apportionment may be appropriate in this case is not, therefore, an obstacle to the entry of summary judgment as to liability.

The Mirabiles also contend that trial is necessary to determine the availability of an affirmative defense to liability. CERCLA sets forth three affirmative defenses, only one of which is relevant here:

There shall be no liability under subsection (a) of this section for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by — . . . (3) an act or omission of a third party other than an employee or agent of the defendant, or than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant . . . if the defendant establishes by a preponderance of the evidence that (a) he exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of such hazardous substance, in light of all relevant facts and circumstances, and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions.

42 U.S.C. § 9607(b). The Mirabiles' argument under this section, briefly stated, is as follows:

The Mirabiles purchased the property at a Sheriff's sale after both Mangels and Turco had ceased all manufacturing and waste disposal activities. No evidence suggests that the Mirabiles added to the waste already present at the site at the time of sale. Moreover, no evidence suggests that the Mirabiles had any sort of employment, agency, or contractual relationship with Turco, Mangels, or their principals or employees.

The Mirabiles further contend that they exercised due care with respect to the wastes found on the site by consolidating the drums in a warehouse. In addition, they have denied that trespassers had access to the warehouse and that the warehouse was not surrounded by a fence or otherwise unguarded. (Admissions PP36-38.)

The United States' response to this argument is, I believe, based upon a misreading of it. In its reply brief, the United States repeatedly states that the Mirabiles carry the burden of establishing their defense under § 107(b)(3). With this I agree; however, as I understand the Mirabiles' argument, they do not seek a ruling, at this stage, that they have prevailed on their § 107(b)(3) defense. Instead, they seek only to establish the existence of a genuine issue of fact with respect to the defense which would preclude the entry of partial summary judgment as to liability. I believe they have succeeded in doing so.

The United States apparently concedes, as an initial matter, that no employment, agency, or contractual relationship existed between the Mirabiles and the individuals and entities previously connected with the Turco site. Thus, the obstacle which has previously precluded use of this defense is not present in this case. See United States v. Argent Corp., 14 ELR 20616 (D.N.M. 1984); United States v. SCRDI, 14 ELR 20272 (D.S.C. 1984).

To prevail on this defense the Mirabiles would also have to establish that the releases or threatened releases were "caused solely" by the acts or omissions of third parties. The uncontroverted evidence is that from December of 1981, when the Mirabiles first took title to the property, until as late as May of 1982, wastes were leaking from drums scattered about the property. Indeed, when DER officials inspected the property in September of 1982, many of the drums, which had now been consolidated in a warehouse, remained in a deteriorated and leaking condition.

The United States relies upon these facts as sufficient to establish that the Mirabiles, at least in part, caused releases or threatened releases at the site and that the § 107(b)(3) defense is therefore unavilable to them. I disagree. Instead, a common sense reading of the language of the statute suggests that the defense would be potentially available to a party who can establish that he purchased property on which hazardous wastes were placed by others and that he did not add to those wastes.⁷

The Mirabiles would also have to establish that they exercised due care with respect to the wastes and that they took precautions against foreseeable acts or omissions of others. I believe they have also created a genuine issue of fact as to whether they have established these elements of the defense. Specifically, the Rogers affidavit, which concldes the wastes presented no signficant threat of fire, explosion, or harm to humans, suggests that the consolidation of the drums in the warehouse was an adequate interim measure. Furthermore, the Mirabiles have refused to admit that the warehouse was unfenced or otherwise unguarded against trespassers. (Admissions, 36-38.)

Because I believe genuine issues of fact exist with respect to the availability of the § 107(b)(3) defense, I will deny the United States' motion for partial summary judgment.

Order

AND NOW, this 4th day of September, 1985, it is hereby ordered that plaintiff's motion for partial summary judgment is DENIED, in accordance with the accompanying memorandum.

AND IT IS SO ORDERED.

1. Additional background, not relevant to the motion before me, may be found in two memoranda and orders dated September 4, 1985, and a third memorandum and order dated June 6, 1985.

2. It may be that the Mirabiles responded by requesting additional time. See Mirabile response at P43, page 19. This assertion is unsupported by affidavit and, in any event, the dispute is not a material one.

3. I recognize that this formulation differs slightly from that which I set forth in the Wade case. See 577 F. Supp. at 1333. Those differences are occasioned by factual differences between the two cases.

4. The United States also seeks to impose liability on the Mirabiles as owners or operators at the time disposal occurred. In support of this contention the United States suggests that Mr. Mirabile's consolidation of the drums in the warehouse constitutes "disposal" under the statute. The Mirabiles vigorously contest this contention. Given my conclusion that the Mirabiles are potentially liable as the present owners of the site I need not address this issue, but I have substantial doubts as to the merits of the United States' contention.

5. CERCLA defines "hazardous substances" by reference to various other federal environmental protection laws. The first four substances fall within CERCLA's ambit by virtue of the fact that they are designated substances pursuant to 33 U.S.C. § 1321(B)(2)(A) (the Clean Water Act). Mercury is a hazardous substance under CERCLA because it is listed as a toxic pollutant pursuant to § 307(a)(1) of the Clean Water Act, 22 U.S.C. § 1317(a).

6. My statement in the Wade case to the effect that "mere dumping" would not necessarily constitute a "release" was intended to reflect that it is possible to dispose of wastes in some fashion without incurring CERCLA liability.

7. In particular, the presence of causation in the language of the defense — which are noticeably absent from the remainder of § 107 — suggests that ownership of the site is not sufficient to preclude use of the defense.