Walls v. Waste Resources Copr.

No. CIV 2-83-418 (E.D. Tenn. October 11, 1985)

The court adopts in its entirety the magistrate's report recommending that the three-year statute of limitations and the 60-day notice requirement in § 112 of the Comprehensive Environmental Response, Compensation, and Liability Act not apply to plaintiffs' private cost recovery action under § 107, that plaintiffs' pendent state law claims should be dismissed without prejudice so that the Tennessee courts can resolve important questions of state law and that plaintiffs' claims under the Resource Conservation and Recovery Act (RCRA) and the Federal Water Pollution Control Act (FWPCA) should be dismissed for failure to give formal notice 60 days before filing suit. The magistrate first holds that § 112's three-year statute of limitations does not apply to cost recovery actions brought by the government under § 107(a)(4)(A) or by private parties under § 107(a)(4)(B). It applies only to claims against the Superfund pursuant to § 111 and actions for natural resources damages under § 107(a)(4)(C). The magistrate holds that the 60-day notice provisions in § 112(a) apply only to claims against the Superfund, not to suits against private parties. Also, whether plaintiffs' response costs are consistent with the national contingency plan is a question of fact that cannot be resolved on summary judgment. The magistrate next holds that plaintiffs' pendent state law claims should be dismissed without prejudice and recommends that plaintiffs be required to litigate these important questions of Tennessee law in state court. Although the state court granted summary judgment for the defendants, the order is interlocutory and the case is still pending. Finally, the magistrate recommends that plaintiff's RCRA and FWPCA citizen suits be dismissed for failure to allege actual notice to the defendants 60 days before filing suit. The magistrate holds that actual notice is required under RCRA § 7002(b)(1) and FWPCA § 505(b)(1). Allegations that defendants have been on constructive notice since plaintiffs filed their state court suit do not qualify as actual notice.

[A related decision appears at 15 ELR 20438.]

Counsel for Plaintiffs
Allan Kanner
Allan Kanner & Assoc.
1616 Walnut St., Philadelphia PA 19103
(215) 546-6661

Counsel for Defendants
James W. Gentry
Gentry & Boehm
600 Dome Bldg., Chattanooga TN 37402
(615) 756-5020

[16 ELR 20797]

Hull, J.:

Order

The Court has carefully reviewed the Magistrate's report and recommendation of September 20, 1985, in light of the many objections filed. The report and recommendation is hereby approved and adopted.

Accordingly, it is ORDERED that:

Plaintiffs' motion for reconsideration of the Court's order of July 15, 1985, is GRANTED; that portion of this order which granted the defendants summary judgment on the CERCLA claim is VACATED; and all motions to dismiss the CERCLA claim are DENIED.

Plaintiffs' motion for leave to file the "Second Amended Complaint" is GRANTED.

All claims in the Second Amended Complaint which arise under the RCRA and FWPCA are hereby DISMISSED for lack of subject matter jurisdiction. All pendent state law claims (Counts 2 through 22 of the Second Amended Complaint) are hereby DISMISSED. The action will proceed on the CERCLA claim only.

All pending motions for dismissal or for summary judgment [Docs. 61, 65, 67, 70, 71, 72, 73, 74, 75, 76, 77, 79, 82, 86, 92] are hereby DENIED.

Waste Resouces Corporation and Waste Resources of Tennessee, Inc.'s motion for oral argument on the Magistrate's recommendation [Doc. 125] is also DENIED.

All objections to the Magistrate's report are OVERRULED.

Murrian, Mag.:

Report and Recommendation

This action was referred to the undersigned pursuant to 28 U.S.C. § 636(b) and Rule 12(b), Federal Rules of Civil Procedure, for a report and recommendation regarding disposition by the District Court of a number of pending motions.

The plaintiffs move for reconsideration of the Court's July 15, 1985, Order dismissing the instant action insofar as it arises under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. 42 U.S.C. §§ 9601-9657 (CERCLA) [Court File Nos. 78 and 85]. In that Order the Court had adopted the undersigned's recommendation that the CERCLA claim was barred by the three-year statute of limitations set forth at 42 U.S.C. § 9612(d). That statute provides as follows:

No claim may be presented, nor may an action be commenced for damages under this subchapter, unless that claim is presented or action commenced within three years from the date of the discovery of the loss or December 11, 1980, whichever is later: Provided, however, That the time limitations contained herein shall not begin to run against a minor until he reaches eighteen years of age or a legal representative is duly appointed for him, nor against an incompetent person until his incompetency ends or a legal representative is duly appointed for him.

In light of the plaintiffs' motion, I have reconsidered my earlier recommndation and now change it for the reasons indicated below.

I am now of the opinion that the three-year statute of limitations does not apply to the present CERCLA claim. This is based on an argument which plaintiff did not present before my first Report and Recommendation.

The three-year statute of limitations imposes limits upon time in which all claims against the "superfund" may be brought (see 42 U.S.C. §§ 9611, 9612, 9631 and 9641) and also upon judicial actions for damages to natural resources (see 42 U.S.C. § 9607(a)(4)(C)). However, the three-year statute of limitations is not a limitation upon actions by a state or the federal government to recoup costs (see 42 U.S.C. § 9607(a)(4)(A)) or upon actions such as this one in which private individuals and entities go to court to recoup costs of "response" (see 42 U.S.C. § 9607(a)(4)(B)).

Section 9612(d) is a victim of "hasty drafting" and its language and legislative history are "less than a model of clarity." United States v. Mottolo, 605 F. Supp. 898, 902 [15 ELR 20444] (D.C.N.H. 1985). Nonetheless, I believe the following analysis is correct.

Section 9612(d), by its terms, is a statute of limitations for "claim[s]" which may be presented and for "action[s] . . . commenced for damages." Nothing is said therein about limiting the rights of government and individuals and private entities to three years in which to bring cost recovery or recoupment lawsuits as provided for in Section 9607(a)(4)(A) and (B). In using the terms "claim" and "damages" in Section 9612(d), the Congress was using terms of art.

A "claim" is a demand in writing for a sum certain. 42 U.S.C. § 9601(4). Claims are demands for compensation from the "superfund." See 42 U.S.C. §§ 9611 and 9612. These claims are treated quite differently in CERCLA from judicial actions for recoupment or damages for injury or loss of natural resources as provided for in 42 U.S.C. § 9607(a). A "claim" can be made by an individual (see 42 U.S.C. § 9611(a)(2)) and this would explain why the tolling provisions for minority and incompetency are set forth in 42 U.S.C. § 9612(d).

"[A]ctions . . . commenced for damages" as described in Section 9612(d) must refer solely to 42 U.S.C. § 9607(a)(4)(C). This is because "damages" is defined as "damages for injury or loss of natural resources as set forth in sections 9607(a) or 9611(b) of this title." 42 U.S.C. § 9601(6). See Mottolo, supra.

Therefore, section 9612(d) is not a statute of limitations which has anything to do with the present action brought under 42 U.S.C. § 9607(a)(4)(B).

The plaintiffs were guilty of a procedural default in that they did not object in a timely manner to my Report and Recommendation filed June 27, 1985. However, the Court has the power to relieve the plaintiffs from the effect of that procedural default, see Patterson [16 ELR 20798] v. Mintzes, 717 F.2d 284 (6th Cir. 1984), and I recommend that it do so in the interests of justice.

Since a statute of limitations defense is an affirmative defense, see Rule 8(c), Federal Rules of Civil Procedure, I need not speculate on what might be the proper statute of limitations in an action brought under 42 U.S.C. § 9607(a)(4)(B). That is a matter for the defendants to raise.

It will therefore be recommended that the Court's July 15, 1985, Order be reconsidered and that defendants' motion for summary judgment on the CERCLA claim as time barred be denied.

II.

In its July 15, 1985, Order, the Court gave plaintiffs ten days to "amend their complaints under the FWPCA and RCRA to sufficiently allege actual notice." [Court File No. 78]. Obviously, the Court granted leave for plaintiffs to file an amended complaint. Instead of filing an amended complaint, however, the plaintiffs moved to amend their complaint by motion filed July 26, 1985 [Court File No. 84].

Since the Court's Order was mailed to the parties, the plaintiffs had until July 29, 1985, in which to file their Amended Complaint. See Rule 6(e), Federal Rules of Civil Procedure. Therefore, the motion to amend was timely filed. Since the Court had already granted leave to amend, it is recommended that the clerk be directed to file the "Second Amended Complaint."

III.

Earlier, the undersigned pretermitted the questions of (1) whether or not the court lacks jurisdiction over the CERCLA count because the plaintiffs allegedly failed to give proper notice under 42 U.S.C. § 9612(a), and (2) whether or not response costs which the plaintiffs seek are "necessary costs which are consistent with the national contingency plan." Report and Recommendation, filed June 27, 1985, p. 7 [Court File No. 68]. If the Court reconsiders its earlier dismissal of the CERCLA claim and vacates that portion of its July 15, 1985, Order, then these questions will have to be addressed. In that event, I make these recommendations:

As I discussed earlier, claims against the "superfund" are distinct from suits for recoupment of response costs. I am of the opinion that the notice provision set forth in 42 U.S.C. § 9612(a) applies only to claims against the superfund. State of New York v. General Electric Co., 592 F. Supp. 291, 299-300 [14 ELR 20719] (D.C.N.Y. 1984). Section 9612(a) does not state that "no action may be commenced" unless a 60-day notice is given. It seems to be a limitation on claims against the "superfund" and not a limitation on actions (i.e., "lawsuits") against private persons or entities.

Whethr or not plaintiffs can prove that any response costs are "consistent with the national contingency plan" is primarily a question of recoverability of costs of response and is a question about which there are unresolved questions of fact. See 42 U.S.C. § 9607(a)(4)(B); Jones v. Inmont Corp., 584 F. Supp. 1425, 1430 [14 ELR 20485] (D.C. Ohio 1984); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 588 F. Supp. 515, 517 [14 ELR 20838] (D.C. Mass. 1983); City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135, 1144 [12 ELR 20915] (D.C. Pa. 1982).

Therefore, the motion for summary judgment should be denied.

IV.

On May 7, 1985, the following defendants were granted summary judgment in the case of Linda Walls, et al. v. Waste Resources Corp., et al., Civil Action No. 3779 in the Circuit Court for Unicoi County, Tennessee:

ALLADIN PLASTICS, INC.

BEECHAM, INC.

ORKIN EXTERMINATING COMPANY

ALLIED CORPORATION (ALLIED CHEMICAL CORP.)

AMERICAN CYANAMID

COLUMBUS McKINNON CORPORATION

BALL METAL AND CHEMICAL CORPORATION

TRW, INCORPORATED

GENERAL ELECTRIC COMPANY

HAYES-ALBION CORPORATION

IPC DENNISON COMPANY

INTERNATIONAL PLAYING CARD AND LABEL CO.

WESTINGHOUSE ELECTRIC CORPORATION

NCR CORPORATION

TEXAS INSTRUMENTS, INC.

ROHM AND HAAS, INC.

HOOVER UNIVERSAL, INC.

BURTON RUBBER PROCESSING, INC.

VELSICOL CHEMICAL CORPORATION

KINGSPORT PRESS.

[See Court File No. 61].

Every one of these defendants is named as a defendant in the "Second Amended Complaint" which will be filed.

The same claims are asserted in the state court action as are asserted in the instant case with the exception of the CERCLA, FWPCA and RCRA claims. The plaintiff class there is the same as the plaintiff class here. Important questions of Tennessee law are presented in the state lawsuit. The exercise of pendent jurisdiction is a matter of discretion with the Court.¹ The state trial judge's order granting summary judgment is interlocutory in nature and so that action apparently is still pending in the state court.

In my opinion, the plaintiff class should be required to litigate their state law claims in the state court and against all potential defendants. It will therefore be recommended that the pendent claims set forth in the Second Amended Complaint, Counts 3-22 (negligence, negligence in conduct of ultrahazardous activity, negligence per se, reckless and wanton misconduct, strict liability, nuisance, trespass, product liability, battery, assault, intentional infliction of emotional distress, negligent infliction of same, and fraudulent concealment) be dismissed without prejudice.

The Second Amended Complaint alleges notice under the Federal Water Pollution Control Act, 33 U.S.C. §§1251, et seq. (FWPCA) and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901, et seq. (RCRA) as follows:

On November 3, 1982, Allan Kanner, attorney for plaintiffs, sent a letter to the EPA giving them actual notice, as required by the [FWPCA, RCRA and CERCLA]. A copy of this correspondence was sent to Tom Tiesler, Director of the Division of Solid Waste Management of the Tennessee Department of Public Health, thereby giving the state of Tennessee actual notice. The defendants have had constructive notice since December, 1983 when the initial action was filed by plaintiffs. Furthermore, on July 24, 1985 a letter was sent to all defendants, the EPA, and the state giving them notice of plaintiffs' intentions to continue to pursue their actions.

Compliance with the sixty-day notice requirement is a jurisdictional prerequisite to bringing suit against private defendnats under the citizen suit provisions of RCRA and FWPCA. Walls v. Waste Resources Corp., 761 F.2d 311 [15 ELR 20438] (6th Cir. 1985); see 33 U.S.C. § 1365(b)(1) and 42 U.S.C. § 6972(b)(1).

The purpose of the sixty-day notice requirement is to obviate the need for resort to the courts by prompting either administrative enforcement of the laws or voluntary compliance by alleged violators. . . . Nevertheless, these citizen suit provisions evince a legislative intent that "citizen[s] are not to be treated as nuisances or troublemakers but rather as welcome participants in the vindication of environmental interests."

Proffitt v. Commissioners, Bristol Tp; 754 F.2d 504, 506 [15 ELR 20209] (3rd Cir. 1985).

In the present action, actual notice was given to the EPA in 1982 but EPA declined to bring an enforcement action, claiming an "[in]sufficient basis" for doing so. Exhibit A to Plaintiff's [16 ELR 20799] Memorandum in Support of their Motion to Amend [Court File No. 84a]. The Tennessee Department of Public Health was also on notice. Id. Finally, plaintiffs allege that the defendants have all been given actual notice by virtue of letters sent to them on July 24, 1985, by the plaintiffs.

The situation is similar to that in Proffitt where the court held that plaintiffs' showing of notice-in-fact overcame the contention that failure to give notice deprived that court of jurisdiction.

In the present action, the plaintiffs sued these same defendants in state court in December 1983 and again on September 28, 1984. See Walls v. Waste Resources Corp., Civ. No. 3779, Circuit Court, State of Tennessee, 1st Judicial Division, at Erwin. The suit did not allege claims under CERCLA, FWPCA or RCRA but it clearly put defendants on notice that plaintiffs believed they had claims based on alleged environmentally unsafe conditions at Bumpass Cove.

Notwithstanding all of this, the "Second Amended Complaint" does not allege actual notice to the defendants 60 days before suit was filed as is required by 33 U.S.C. § 1365(b)(1) (FWPCA) and 42 U.S.C. § 6972(b)(1) (RCRA) and Walls v Waste Resources Corp., 761 F.2d at 317.

More allegations that the state of Tennessee, the EPA and the private defendants have been on notice for a period of time exceeding sixty days, and that "further notice would be meaningless" fail to sufficiently set forth the jurisdictional predicate of actual notice.

Id. This action was sent back to this Court for leave to amend to allege actual, not constructive, notice. The best that plaintiffs have alleged here is constructive notice to defendants since December 1983 and actual notice since July 24, 1985. This does not comply with the 60-day before suit "formal notice" required by FWPCA and RCRA as established by the Court of Appeals. Id. 761 F.2d 316-317. Therefore, the Court's subject matter jurisdiction over the RCRA and FWPCA claims has not been properly invoked. The result might be different if Proffitt were controlling, but it is not. This Court must be obedient to the decisions of the Sixth Circuit. Without subject matter jurisdiction, this Court lacks the power to proceed on the RCRA and FWPCA claims.

VI.

Central Soya of Monroe, Inc.'s motion for summary judgment is moot since it is not named as a defendant in the "Second Amended Complaint" and is therefore no longer a party defendant [Court File No. 76].

VII.

Based on the foregoing, it is recommended that

A. All claims in the Second Amended Complaint under RCRA and FWPCA be dismissed for want of subject matter jurisdiction, Rule 12(b)(1) and 12(h)(3), Federal Rules of Civil Procedure (Counts I and II).

B. Plaintiffs' motion for reconsideration of the Court's July 15, 1985 Order be GRANTED; that the portion thereof granting defendants' motions for summary judgment on the CERCLA claim be VACATED; and that such motion and any motions to dismiss such claim be DENIED.

C. Plaintiffs' motion for leave to file the "Second Amended Complaint" be GRANTED and that the Clerk be directed to file same.

D. The court decline to exercise pendent jurisdiction over all state law claims contained in the "Second Amended Complaint (Counts 3 through 22).

and further that, except as indicated above,

E. Velsicol Chemical Corporation's motion for summary judgment be DENIED [Court File No. 61].

F. Kingsport Press, Inc.'s motion for summary judgment be DENIED [Court File No. 65].

G. Allied Corporation's motion for summary judgment be DENIED [Court File No. 67].

H. Burton Rubber Processing's, Hayes-Albion Corporation's and IPC Dennison Company/International Playing Card and Label Company's motion to dismiss be DENIED [Court File No. 70].

I. Waste Resources Corporation and Waste Resources of Tennessee, Inc.'s motion to dismiss and/or for summary judgment be DENIED [Court File No. 71]

J. General Electric Company's motion for summary judgment and to dismiss be DENIED [Court File No. 72].

K. Alladin Plastics, Inc.'s motion for summary judgment and to dismiss be DENIED [Court File No. 73].

L. NCR Corporation's motion to dismiss be DENIED [Court File No. 74].

M. TRW Inc.'s motion to dismiss and/or for summary judgment be DENIED [Court File No. 75].

N. Central Soya of Monroe, Inc.'s motion for summary judgment be DENIED as moot [Court File No. 76].

O. Ball Corporation's and Columbus McKinnon Corporation's motion for summary judgment be DENIED [Court File No. 77].

P. Westinghouse Electric Corporation's motion to dismiss be DENIED [Court File No. 79].

Q. Texas Instruments, Inc.'s motion for summary judgment be DENIED [Court File No. 82].

R. Hoover Universal, Inc.'s motion for summary judgment and to dismiss be DENIED [Court File No. 86].

S. Norandex, Inc.'s motion for summary judgment and to dismiss be DENIED [Court File No. 92].

T. Any motions overlooked by the undersigned be renewed within 10 days of service of this Report and Recommendation or, failing that, that such motions be deemed DENIED.²

1. Needless decisions of state law should be avoided by federal courts as a matter of comity and in order to promote justice between the parties "by procuring for them a surer-footed reading of applicable law." United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S. Ct. 1130, 1139 (1966); J.P. v. DeSanti, 653 F.2d 1080 (6th Cir. 1981). Where state law matters are being concurrently litigated in state and federal court, the latter court should decline to exercise jurisdiction over pendent claims and should let the state court proceeding run its course. See Goldman v. First Fed. Sav., etc., 518 F.2d 1427, 1253 (7th Cir. 1975); Pinkney v. Ohio Environmental Prot. Agency, 375 F. Supp. 35 [4 ELR 20460] (D.C. Ohio 1974).

2. Any objections to this report and recommendation must be filed within 10 days of its service or further appeal will be waived. 28 U.S.C. § 636(b)(1)(B) and (C). United States v. Walters, 638 F.2d 947-950 (6th Cir. 1981).