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17 ELR 20539 | Environmental Law Reporter | copyright © 1987 | All rights reserved United States v. Miami Drum Services, Inc.No. 85-0038-Civ-ARONOVITZ (S.D. Fla. December 12, 1986)The court rules on the United States' motion for early determination of special legal questions in its action under § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) to recover the costs of cleaning up an abandoned drum recycling facility. The court initially declines to rule on the retroactive applicability of the Superfund Amendments and Reauthorization Act of 1986 (SARA) but adopts SARA as guidance on congressional intent. The court first rules that responsible parties are strictly liable for response costs under CERCLA. The court next adopts the rule in United States v. Chem-Dyne Corp., 13 ELR 20986, that liability under § 107(a) is joint and several unless a defendant can prove that the harm is divisible and there is a reasonable basis for apportioning the harm. The court rejects the ruling by two other district courts that allows courts to apportion damages even if defendants cannot prove the amount they contributed to the harm. The court rules that a right to contribution exists under CERCLA. The addition of an express right to contribution in SARA demonstrates that Congress intended that such a right exist. The court rules that the government need make no showing of causation beyond establishing that defendants fall within one of the four classes of responsible parties in § 107(a). The burden then shifts to defendants to prove that one of the defenses in § 107(b) applies. The court holds that CERCLA may be applied retroactively in this case. Congress intended the Act to apply retroactively. Further, CERCLA is not retroactive in the constitutional sense as applied to the facts of this case since it imposes liability for present conditions, even if stemming from past acts. Even if CERCLA were retroactive in the constitutional sense, the court notes that retroactive application would satisfy substantive due process requirements. The court rules that the government is not required under § 104(a)(1) to give responsible parties the opportunity to clean up the site at their own expense before it undertakes a cleanup. Further, the government's compliance with the duties set out in § 104 is irrelevant for purposes of determining liability under § 107. The court rules that the claims procedures in § 112 do not apply to cost recovery actions brought by the government. Finally, the court rules that the United States is not entitled to a presumption that its cleanup costs are consistent with the National Contingency Plan when it did not perform the cleanup itself, but instead entered into a cooperative agreement under which a county performed the cleanup and was reimbursed by the United States. Counsel for Plaintiff Counsel for Defendants Joseph Kashi Aronovitz, J.: Before the Court is Plaintiff United States of America's Motion styled "Motion for Early Determination of Special legal Questions." Defendants argue that this Motion is essentially a Motion for Summary Judgment. In an abundance of caution, this Court issued a timely Fed. R. Civ. P. 56 notice to place the parties upon notice that this Motion might be addressed by the Court either as a Motion for Summary Judgment or as a Determination of Legal Issues. Now having heard oral argument on the Motion, examined all of the memoranda filed by the parties, pertinent portions of the record, and being otherwise fully advised in the premises, this Court concludes that Plaintiff does not seek summary judgment by this Motion, nor is the matter before the Court in that posture, nor is the Motion in fact supported by Affidavits or otherwise as though it were a Motion for Summary Judgment. The Court, therefore, addresses Plaintiff's Motion for Early Determination of Special Legal Questions purely upon the basis of rendering rulings on legal questions which are susceptible and/or capable of being reached at this stage of the proceedings so that future proceedings may be guided thereby. The Court addresses issues now ripe for legal determination. Some issues, indeed, are not ripe for determination prior to trial, as will hereafter be indicated, and rulings thereon are reserved. The subject of this action is a waste disposal site located at 7049 Northwest 70th Street in Miami, Florida. The government alleges that from the early 1970's to 1981, Defendant Miami Drum Services, Inc. operated a drum recycling and reconditioning facility at the subject site. The government further alleges that many of the drums processed at the site contained at least residual amounts of chemicals identified as "hazardous substances" under the Comprehensive Environmental, Response, Compensation and Liability Act ("CERCLA"). The Miami Drum site is allegedly situated approximately 750 feet from the Medley Wellfield, a major source of drinking water for the Miami area and a part of the Biscayne Aquifer — the primary drinking water source for Southeast Florida. In early 1981, the Dade County Department of Environmental Resource Management ("Dade County") discovered the extent of contamination at the site and filed a complaint in state court against Miami Drum. Miami Drum ceased operations at the site in the summer of 1981. In conjunction with a cooperative agreement pursuant to Section 104(d)(1) of CERCLA, 42 U.S.C. § 9604(d)(1) between the Environmental Protection Agency, Dade County, and the State of Florida, Dade County cleaned up the site in 1981 and 1982. The EPA thereafter reimbursed Dade County and the State from the Superfund1 in the amount of $1,334,565 for costs incurred in cleaning up the site. The United States now seeks recovery under Section 107(a)(4)(A) of CERCLA, 42 U.S.C. § 9607(a)(4)(A) of the amount reimbursed, as well as investigative and administrative costs, prejudgment interest and attorney's fees. Plaintiff has alleged that Defendant Miami Drum Services, Inc. and Co-Defendants Fay Ball, Fred Ball and Melvin J. Ball, in their individual capacities, are liable under Section 107(a)(2) and/or Section 107(a)(4) of CERCLA as either owners or operators of a hazardous waste facility and/or as transporters of hazardous substances. Plaintiff has alleged that Defendants Allen Chemical Co., a/k/a Allen Industrial Products Co., Allied Photo Offset Supply Corporation, Argo Industrial Supply, Inc., Eastern Air Lines, Inc., Key Pharmaceuticals, Inc. and Tyco Laboratories, Inc. are liable under Section 107(a)(3) of CERCLA as generators of hazardous substances. There are also two separate third party actions presently pending before the Court in conjunction with this proceeding. One is an action by Key Pharmaceuticals, Inc. against various insurance companies for declaratory and other relief; the other is an action by Defendants herein against approximately 230 parties, allegedly waste generators, for contribution. Both actions have been severed from the main action for purposes of trial, and the third party action for contribution has been stayed in all respects pending the outcome of trial. This Order is entered in the main action which is presently specially set for trial to commence January 6, 1987. This Court has jurisdiction over this action pursuant to Section 113(b) of CERCLA, 42 U.S.C. § 9613(b) and 28 U.S.C. § 1345. Section 107(a) of CERCLA enumerates those classes of persons liable for response costs incurred by the government under Section 104, though the exact scope of liability under Section 107 is unclear. Because the disposal of hazardous substances is a uniquely [17 ELR 20540] national concern and in accordance with legislative intent,2 the rights, liabilities and responsibilities of the United States under 42 U.S.C. § 9607 are to be governed by an evolving Federal common law. United States v. Chem-Dyne Corp., 572 F. Supp. 802 [13 ELR 20986] (1983). So too, it is incumbent upon this Court to fill in the "interstitial gaps" inevitably left in federal statutes. United States v. Little Lake Misene Land Co., 412 U.S. 580, 593 (1973). Though not briefed beforehand, Plaintiff argued at oral argument that the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), enacted October 3, 1986, should be applied retroactively as it impacts upon those questions raised in Plaintiff's Motion for Early Determination of Special Legal Questions.3 While not ruling on the retroactive applicability of SARA, this Court adopts SARA as providing guidance to legislative intent in fashioning a Federal common law for CERCLA liability. Several of the questions presented in Plaintiff's Motion involve the propriety of various affirmative defenses interposed by Defendants herein. Notwithstanding anything to the contrary herein contained, no Defendant is or will be deprived of the right to assert any defenses to CERCLA liability that are authorized by law. The questions presented by United States of America's Motion for Early Determination of Special Legal Questions are as follows: 1. Based on statutory language, legislative history, and the developing case law, does the Comprehensive Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., provide for strict, joint and several liability? 2. If so, do CERCLA Defendants have an action in contribution against other responsible parties? 3. Based on CERCLA's statutory language, legislative history, and developing case law, what proof is required to establish "causation" under CERCLA? 4. Does CERCLA apply to pre-enactment waste disposal, the effects of which continue after CERCLA's enactment? 5. Of what significance is Miami Drum Services' compliance with United States Department of Transportation drum certification regulations? 6. Does CERCLA preclude the government's recovery of cleanup costs where all parties who are liable for a site are not provided an opportunity to cleanup prior to government-sponsored cleanup? 7. Was the government required to comply with the "claims procedures" set forth in Section 112 of CERCLA, 42 U.S.C. § 9612, in reimbursing Dade County and the State of Florida for cleanup costs associated with the Miami Drum site? 8. What is the allowable scope of Plaintiff's cost recovery under Section 107 of CERCLA? 9. Who bears the burden of proof with respect to challenges to the government's cleanup costs? BASED ON STATUTORY LANGUAGE, LEGISLATIVE HISTORY, AND THE DEVELOPING CASE LAW, DOES THE COMPREHENSIVE ENVIRONMENTAL, RESPONSE, COMPENSATION AND LIABILITY ACT ("CERCLA"), 42 U.S.C. § 9601 ET SEQ., PROVIDE FOR STRICT, JOINT AND SEVERAL LIABILITY? Although framed as one question, this first question actually involves two issues. The question of whether CERCLA provides for strict liability and the question of whether CERCLA provides for joint and several liability will be discussed separately. Every court to consider this issue has concluded that, unless one of the defenses under Section 107(b) of CERCLA applies, a party identified as responsible under Section 107(a) is strictly liable, regardless of fault, for response costs incurred by the government. See, e.g., New York v. Shore Realty Corp., 759 F.2d 1032 [15 ELR 20358] (2d Cir. 1985); United States v. Ward, 618 F. Supp. 884 [16 ELR 20127] (E.D.N.C. 1985). CERCLA itself provides that the standard of liability to be imposed thereunder is to be that "standard of liability which obtains under Section 311 of the Federal Water Pollution Control Act." 42 U.S.C. § 9601(32). Section 311 of the Federal Water Pollution Control Act has been interpreted as imposing strict liability. See, e.g., United States v. Hollywood Marine, Inc., 625 F.2d 524 [10 ELR 20718] (5th Cir. 1980), cert. denied, 451 U.S. 994 [11 ELR 20679] (1981); United States v. Bear Marine Services, 509 F. Supp. 710 [11 ELR 20659] (E.D. La. 1980), remanded on other grounds, 696 F.2d 1117 (5th Cir. 1983). Further, the legislative history of CERCLA supports the view that strict liability was contemplated for those persons found liable who could not make out one of the statutory defenses. See, e.g., 126 Cong. Rec. H11799 (daily ed. Dec. 30, 1980) (remarks of Rep. Jeffords), 1 Leg. Hist. at 813; 126 Cong. Rec. § 14964 (daily ed. Nov. 24, 1980) (remarks of Sen. Randolph). On the basis of the legislative history of CERCLA and developing case law, this Court concludes that strict liability, for those found liable, is mandated. To hold otherwise would frustrate the purposes of CERCLA.4 b.) Joint and Several Liability Again, with respect to liability, reference is made in CERCLA to the standard of liability that obtains under Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1321. While joint and several liability has been imposed under that Act, see, e.g., U.S. v. M/V Big Sam, 681 F.2d 432 [12 ELR 20994] (5th Cir.), reh'g. denied, 693 F.2d 451 [13 ELR 20206] (5th Cir. 1982), cert. denied, 462 U.S. 1132 (1983), its applicability has not been imposed so consistently as to be deemed dispositive. The original version of CERCLA contained a provision for joint and several liability. It was the most controversial provision of the Act and was ultimately deleted. 126 Cong. Rec. 30,932 (1980). In the seminal case on the subject of joint and several liability under CERCLA, a district court concluded, after considering CERCLA's legislative history, that deletion of the provision indicated an intent to avoid its mandatory imposition in cases where the result would be inequitable. United States v. Chem-Dyne Corp., 572 F. Supp. 802, 808 [13 ELR 20986] (S.D. Ohio 1983). The Chem-Dyne court explained that the omission in the bill of joint and several liability was designed to enable courts, using principles of common law, to determine on a case-by-case basis the scope of liability in cases involving multiple defendants. Id. The court in Chem-Dyne adopted the following principles from the Restatement on Torts: 1. When two or more persons acting independently cause a distinct or single harm for which there is a reasonable basis for division according to the contribution of each, each is subject to liability only for the portion of the total harm that he has himself caused. Restatement (Second) of Torts §§ 433A, 881 (1976). 2. Where two or more persons cause a single and indivisible harm, each is subject to liability for the entire harm. Restatement (Second) of Torts § 875. 3. Where the conduct of two or more persons has combined to violate CERCLA, and one or more of the defendants seek to limit his liability on the ground that the entire harm is capable of apportionment, the burden of proof as to apportionment is upon each defendant. Restatement (Second) of Torts § 433B. Id. at 810 (emphasis added). The Chem-Dyne analysis has been adopted by several district courts. See, e.g., United States v. Conservation Chemical Co., 589 F. Supp. 59 [14 ELR 20207] (W.D. Mo. 1984); United States v. South Carolina Recycling and Disposal, Inc., 20 Env't Rep. Cas. (BNA) 1753 [14 ELR 20272] (D.S.C. 1984); United States v. Wade, 577 F. Supp. 1326 [14 ELR 20096] (E.D. Pa. 1983). Chem-Dyne [17 ELR 20541] has also received approval by a primary sponsor of the Superfund Amendments of 1985 in remarks to the House: Thus, nothing in this bill is intended to change the application of the Federal rule of joint and several liability enunciated by the Chem-Dyne court. 131 Cong. Rec. H11073 (daily ed. December 5, 1985) (remarks of Rep. Eckart). The rule of law that emerges from Chem-Dyne and which has met with acceptance by other district courts, is that liability under Section 107(a) is joint and several unless a defendant or defendants can prove that the environmental injury is divisible and there is a reasonable basis for apportioning the harm. This Court so holds as well. This ruling in no way shall be construed as any indication that joint and several liability is proper here, for that determination must await the development of facts at trial on the questions of divisibility and apportionment.5 Unlike Chem-Dyne, however, two courts held that while Section 107 of CERCLA permits the imposition of joint and several liability if the defendants caused an indivisible harm, courts are still empowered to apportion damages based on a set of criteria, even when the defendants cannot prove the amount they contributed to the harm. United States v. Stringfellow, 20 Env't Rep. Cas. (BNA) 1905, 1910 [14 ELR 20385] (C.D. Cal. 1984); United States v. A & F Materials, Inc., 578 F. Supp. 1249 [14 ELR 20105] (S.D. Ill. 1984). Defendants urge, based on these cases, that the Court should employ a more moderate approach to joint and several liability than Chem-Dyne in the interest of fairness. But this argument overlooks the equitable principles inherent in the Chem-Dyne approach. Proving divisibility in a toxic waste case is not an insurmountable burden.6 Once a defendant has met this burden, the court may then employ equitable principles to apportion damages. The Court thus rejects the Stringfellow/A & F Materials analysis as applied to this case in favor of the Chem-Dyne approach, particularly in view of Congress' apparent approval of Chem-Dyne as previously discussed. IF STRICT, JOINT AND SEVERAL LIABILITY MAY BE APPLIED, DO CERCLA DEFENDANTS HAVE AN ACTION IN CONTRIBUTION AGAINST OTHER RESPONSIBLE PARTIES? Although CERCLA as originally enacted does not expressly provide for a right to contribution, the legislative history of Section 107(e)(2) seems to indicate that a right to contribution exists. That section states: Nothing in this title, including the provisions of paragraph (1) of this subsection, shall bar a cause of action that an owner or operator or any other person subject to liability under this section, or a guarantor, has or would have, by reason of subrogation or otherwise against any person. CERCLA § 107(e)(2), 42 U.S.C. § 9607(e)(2) (1982). A similar provision was included in H.R. 7020, 96th Cong., 2d Sess. § 3071(e) (1980). In speaking about that section, Representative Gore stated that under the joint and several liability scheme of the statute, any defendant that paid all of the response costs to a plaintiff "would then have the right to go against the other 'non-apportioned' defendants for contribution. . . ." 126 Cong. Rec. 26,785 (1980). The court in Chem-Dyne seems to have likewise interpreted Section 107(e)(2). United States v. Chem-Dyne Corporation, 572 F. Supp. 802, 807 n.3 [13 ELR 20986] (S.D. Ohio 1983) ("42 U.S.C. § 9607(e)(2), which provides for contribution, was viewed as only having relevance in [the] joint and several liability context." [emphasis added; citation omitted]). Section 107(e)(2) to the side, this "gap" in the original CERCLA scheme appears to have been expressly answered in the affirmative in the Superfund Amendments and Reauthorization Act of 1986 ("SARA"). That Act, at Section 113(b)(1) provides: Any person may seek contribution from any other person who is liable or potentially liable under section 107(a) during or following any civil action under section 106 or 107(a). . . . In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. While Congressional intent as to the right to contribution may have been open to debate pre-SARA, it cannot now be disputed, nor are the parties here in dispute,7 that a right to contribution exists under CERCLA for those parties held jointly and severally liable for damages in excess of their rightful share. A right to contribution has the effect of softening the harshness of joint and several liability, as argued by Defendants, and appears to be an attempt to address the concerns which troubled the courts in Stringfellow and A & F Materials.8 BASED ON CERCLA'S STATUTORY LANGUAGE, LEGISLATIVE HISTORY, AND DEVELOPING CASELAW, WHAT PROOF IS REQUIRED TO ESTABLISH "CAUSATION" UNDER CERCLA? The United States need not make a showing of causation in this case beyond what is expressly required by Section 107(a) of CERCLA, 42 U.S.C. § 9607(a). New York v. Shore Realty Corp., 759 F.2d 1032, 1043-44 [15 ELR 20358] (2d Cir. 1985); United States v. Conservation Chemical Co., 619 F. Supp. 162, 190-91 [16 ELR 20193] (W.D. Mo. 1985); United States v. Wade, 577 F. Supp. 1326, 1333-34 [14 ELR 20096] (E.D. Pa. 1983). Section 107(a) of CERCLA establishes a liability classification scheme which identifies four classes of defendants: current owners of a disposal site, past owners of a disposal site, generators who arrange for disposal at a site, and transporters of waste to a site.9 That provision represents Congress' measured judgment regarding the nexus required between a party and a site sufficient to justify the imposition of liability. This Court adopts and reaffirms the observations of the court in United States v. South Carolina Recycling and Disposal, Inc., 20 Env't Rep. Cas. (BNA) 1753 [14 ELR 20272] (D.S.C. 1984) that: Once the requisite nexus is established, each class is strictly liable unless they can prove that, under the defenses enumerated in CERCLA Section 107(b)(1)-(4), the release or threat of release of hazardous substances was caused solely by unrelated persons or events. Id. at 1756 (footnote omitted). Thus, the statute establishes a rebuttable presumption that parties belonging to the classes specified in CERCLA Section 107(a)(1)-(4) are causally connected to the release or threat of release at the site and shifts the burden of proof to them to show, by a preponderance of the evidence, that they did not cause or contribute to the threats posed by the site within the meaning of Section 107(b). Defendants argue that causation is an indispensable element of any tort action, even one based upon strict liability, citing W. Prosser & Keeton, Law of Torts, §§ 75-81, 86-91 (5th ed. 1984). Defendants would require Plaintiff to directly link the acts of each generator defendant herein to the environmental harm which prompted the cleanup. The causation requirement under CERCLA differs from state common law causation, which normally requires a showing of cause-in-fact and proximate cause. As initially stated, [17 ELR 20542] however, interpretation of CERCLA's liability provisions is a matter of Federal common law. CERCLA's causation requirement has been somewhat relaxed due to the difficult proof problems inherent in toxic waste cases. In order to effectuate the remedial goals of CERCLA10 and in deference to Congress' classification scheme, this Court holds that Plaintiff need make no showing of causation beyond what is expressly required by Section 107(a) of CERCLA. DOES CERCLA APPLY TO PRE-ENACTMENT WASTE DISPOSAL, THE EFFECTS OF WHICH CONTINUE AFTER CERCLA'S ENACTMENT? CERCLA was enacted on December 11, 1980. Plaintiff's Amended Complaint claims that the damages occurred at the Miami Drum site "from the early 1970's until 1981." Cleanup of the site occurred in 1981. The question of whether CERCLA may be applied retroactively involves two questions, the first of which is whether Congress meant for it to apply retroactively. A number of district courts have analyzed the legislative history of the statute and have concluded that the purpose of CERCLA is retrospective and remedial. One judge has stated that CERCLA "is by its very nature backward looking." United States v. Shell Oil Co., 605 F. Supp. 1064, 1072 [15 ELR 20337] (D. Colo. 1985). Accord United States v. South Carolina Recycling and Disposal, Inc., 20 Env't Rep. Cas. (BNA) 1753 [14 ELR 20272] (D.S.C. 1984); Ohio ex rel. Brown v. Georgeoff, 562 F. Supp. 1300 [13 ELR 20457] (N.D. Ohio 1983); Jones v. Inmont Corp., 584 F. Supp. 1425 [14 ELR 20485] (S.D. Ohio 1984). It is clear from the legislative history that Congress, in enacting CERCLA, intended it as a tool to effectuate cleanup of the 30-50,000 improperly managed toxic waste sites already in existence at the time of CERCLA's enactment. 5 U.S. Code Cong. & Ad. News 6119, 6119-20 (1980). The second issue regarding CERCLA's retroactivity is whether CERCLA may be constitutionally retroactively applied. The basic constitutional issue posed in CERCLA is whether the standard of rationality and fairness written into the statute squares with the due process clause. A fundamental rule of judicial restraint requires that federal courts, prior to reaching any constitutional question, must consider nonconstitutional grounds for decision. Jean v. Nelson, 105 S. Ct. 2992, 2997-98 (1985). After considering the overall scheme and underlying purposes of CERCLA, this Court agrees with the reasoning of District Court Judge Simons that CERCLA is not "retroactive" in the constitutional sense as applied to the facts of this case. United States v. South Carolina Recycling and Disposal, Inc., 20 Env't Rep. Cas. (BNA) 1753 [14 ELR 20272] (D.S.C. 1984). A statute that attaches liability to present conditions stemming from past acts does not necessarily have retroactive effects that are subject to due process limitations. Although not retroactive in the constitutional sense, the superfund law is unavoidably "retroactive" by its very nature in that it permits the government to abate post-CERCLA health hazards which may or may not be the consequence of pre-CERCLA actions. But to characterize CERCLA as retroactive in its application on this basis, misconceives the purpose of CERCLA. CERCLA does not remedy past "bad acts," but "merely relates to current and future conditions." United States v. Price, 523 F. Supp. 1055, 1971-72 [11 ELR 21047], aff'd, 688 F.2d 204 [12 ELR 21020] (3d Cir. 1982) (interpreting Section 7003 of the Resource Conservation and Recovery Act, 42 U.S.C. § 6973, a statutory provision analogous to Section 107 of CERCLA). In this sense, CERCLA is affirmatively prospective in its application. As the Supreme Court has stated: A statute is not rendered retroactive merely because the facts or requisites upon which its subsequent action depends, or some of them, are drawn from a time antecedent to the enactment. Reynolds v. United States, 292 U.S. 443, 449 (1934). Because the Court does not interpret CERCLA as retroactive in application in the constitutional sense, it need not reach the due process issues. However, were the Court to interpret CERCLA otherwise, it would hold that the retroactive application of CERCLA satisfies substantive due process requirements.11 The Court's reasoning which would apply if the constitutional issue needed to be addressed follows. The proper starting point for analyzing whether retroactive application of a statute violates the due process clause is the Supreme Court case of Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976), which dealt with the constitutionality of retroactive imposition of strict liability under the Black Lung Benefits Act on coal mine operators to compensate past employees and their survivors for black lung disease. In the Usery case, the Court upheld a system of liability in which mine operators were assessed for the black lung problems of miners who at some time had been their employees. The Court found that: . . . [t]he imposition of liability for the effects of past acts is justified as a rational measure to spread the costs of the employees' disabilities to those who have profited from the fruits of their labor, — the operators and the coal consumers. The Court indicated that Congress has considerable discretion in imposing liability, as long as the particular approach is rational. The burden is on the challenging party to prove that the economic results of such legislation render the law arbitrary and irrational. According to the Court, the element of retroactivity does not of itself violate due process: The Due Process Clause of the Fourteenth Amendment generally does not prohibit retrospective civil legislation, unless the results are particularly harsh and oppressive. The Court holds that Defendants here have not met their burden by showing either that Congress' chosen method for spreading the costs incident to toxic waste cleanups is arbitrary and irrational or that the economic impact is particularly harsh and oppressive. Like the Black Lung Benefits Act, CERCLA is a rational measure to ensure that those parties who have economically benefited from waste generation and inexpensive disposal pay now for its cleanup. Defendants, or at least some of them, apparently concede the facial constitutionality of CERCLA's retroactive application, but argue instead that retroactive application as applied to the facts of this case is unconstitutional. The Defendants request the Court to withhold a determination of this issue until a complete record is established herein. In the first instance, Defendants have not come forth with any basis to warrant an "as applied" challenge, nor have Defendants proffered any authority indicating how it could constitute a legal defense, even if factually established.12 Defendants instead seem to argue that the rational relationship test applicable to due process challenges is somehow fact-dependent. This argument misperceives substantive due process analysis, and without any submission by the Defendant to the contrary, there simply is no basis for reserving this issue to be revisited again at a later date.13 OF WHAT SIGNIFICANCE IS MIAMI DRUM SERVICES' COMPLIANCE WITH UNITED STATES DEPARTMENT OF TRANSPORTATION DRUM CERTIFICATION REGULATIONS? Defendant Apperson has raised an affirmative defense which states, essentially, that the government is estopped from pursuing cleanup costs from these Defendants because Miami Drum's operations were certified by the Department of Transportation and complied with Department of Transportation procedures for waste disposal practices (presumably in the course of transportation of these wastes to the disposal site). What these Department of Transportation regulations actually require and what the effect of certification is, is a matter of dispute between the parties. What exactly Defendants hope to show by way of these Department of Transportation regulations is unclear at present. In order to afford Defendants a full opportunity to establish any and all affirmative defenses permissible by law, the Court reserves ruling on what significance, if any, can be attached to the Department of Transportation drum certification regulations. At a later juncture, after the record is more fully developed, the Court will be in a position to rule whether this affirmative defense is sufficient as a mater of law and, if so, whether it is then sufficient as a matter of fact. DOES CERCLA PRECLUDE THE GOVERNMENT'S RECOVERY OF CLEANUP COSTS WHERE ALL PARTIES WHO ARE LIABLE FOR A SITE ARE NOT PROVIDED AN OPPORTUNITY TO CLEANUP PRIOR TO GOVERNMENT-SPONSORED CLEANUP? Stated another way, this question asks: Is the government under a duty to give responsible parties the opportunity to cleanup the site at their own expense before it undertakes a cleanup operation? The argument that there is such a duty centers on Section 104(a)(1), which states: Whenever any hazardous substance is released or there is a substantial threat of such a release into the environment . . . the President is authorized to act, consistent with the National Contingency Plan, to remove or arrange for the removal of . . . such hazardous substance . . . unless the President determines that such removal and remedial action will be done properly by the owner or operator of the vessel or facility from which the release or threat of release emanates, or by any other responsible party. Two district courts have held that this language merely encourages, rather than compels, responsible party participation in cleanups. United States v. Medley, et al.; Civil Action No. 7:86-252-3 [17 ELR 20299] (D.C.S.C. July 6, 1986); United States v. Dickerson, Civil Action No. Y-85-3249 [16 ELR 20970] (D. Md. May 28, 1986). This Court agrees. A reading of the statute so as to require the government to contact all potentially responsible parties and attempt to work out a private party cleanup would seriously undermine the expeditious cleanup of toxic waste sites. Defendants further argue that in addition to a duty to give notice to responsible parties before proceeding with a cleanup, Section 104 imposes other affirmative duties upon the government, including a duty to carefully monitor remedial activities of other governmental entities prior to reimbursing these entities from the Superfund. Upon an examination of CERCLA's statutory scheme, this Court concludes that internal procedures between and among United States governmental entities are irrelevant for purposes of determining liability. The liability provisions of CERCLA, Section 107, clearly state that liability shall attach, subject to certain defenses, "notwithstanding any other provision or rule of law." Particularly in view of the strong indication of legislative intent, this Court concurs with the majority rule that the liability provisions of Section 107(a) are wholly separate and independent from the requirements of Section 104 of CERCLA. See, e.g., New York v. General Electric Company, 592 F. Supp. 291, 302 [14 ELR 20719] (N.D.N.Y. 1984); United States v. Wade, 577 F. Supp. 1326, 1336 [14 ELR 20096] (E.D. Pa. 1983); Ohio v. Georgeoff, 562 F. Supp. 1300, 1315 [13 ELR 20457] (N.D. Ohio 1983). WAS THE GOVERNMENT REQUIRED TO COMPLY WITH THE "CLAIMS PROCEDURE" SET FORTH IN SECTION 112 OF CERCLA, IN REIMBURSING DADE COUNTY AND THE STATE OF FLORIDA FOR CLEANUP COSTS ASSOCIATED WITH THE MIAMI DRUM SITE? Section 112 of CERCLA provides that "all claims which may be asserted against the Fund pursuant to section 9611 of this title shall be presented in the first instance to the owner, operator, or guarantor of the vessel or facility" sixty days prior to commencing suit. When read together with Section 9611, it is clear that at least one of the purposes of Section 112 is to place a duty upon third parties who perform cleanups to seek payment from the responsible parties before seeking payment from the Superfund. In this case, Dade County, pursuant to a cooperative agreement with the EPA and the State of Florida, cleaned up the Miami Drum site. The EPA thereafter used Superfund monies to reimburse the County in accordance with the cooperative agreement. Defendants assert that they should have been given sixty days prior notice of the filing of the instant action by the United States in accordance with Section 112. By Order dated July 17, 1986, upon Defendants Argo and Allied's Motions to Dismiss, this Court held that it "finds persuasive the reasoning of those courts which have held that § 9612(a) does not apply to suits for reimbursement of response costs brought by the government, and that the sixty-day notice requirement is not jurisdictional in any event," citing Idaho v. The Bunker Hill Company, Civ. No. 83-3161 [16 ELR 20715] (D. Id. May 7, 1986); Walls v. Waste Resources Corp., Civ. No. 2-83-418 [16 ELR 20797] (E.D. Tenn. Oct. 12, 1985); Colorado v. ASARCO, Inc., 616 F. Supp. 822 [16 ELR 20046] (D. Colo. 1985); United States v. Conservation Chemical Co., 619 F. Supp. 162 [16 ELR 20193] (W.D. Mo. 1985); New York v. General Electric Corporation, 592 F. Supp. 291 [14 ELR 20719] (N.D.N.Y. 1984); Pinole Point Properties v. Bethlehem Steel Corp., 596 F. Supp. 283 [15 ELR 20173] (N.D. Cal. 1984). Having entertained arguments on this issue again within the context of Plaintiff's Motion for Early Determination of Special Legal Questions, the Court readopts and reaffirms the ruling by Order dated July 17, 1986. Section 112 does not apply to actions brought by the government for reimbursement to the Superfund. WHAT IS THE ALLOWABLE SCOPE OF PLAINTIFF'S COST RECOVERY UNDER SECTION 107 OF CERCLA? The Court reserves ruling on this issue in its entirety until the costs for which Plaintiff seeks reimbursement is made clear. This question is not susceptible of determination at this stage in the proceeding, nor would a determination now streamline trial of this matter. WHO BEARS THE BURDEN OF PROOF WITH RESPECT TO CHALLENGES TO THE GOVERNMENT'S CLEANUP COSTS? Several district courts have held that defendant bears the burden on this issue. See, e.g., United States v. Ward, 618 F. Supp. 884, 899 [16 ELR 20127] (E.D.N.C. 1985); United States v. Conservation Chemical Co., 619 F. Supp. 162, 186 [16 ELR 20193] (W.D. Mo. 1985). Placing the burden on defendants to challenge the government's cleanup costs implies that government actions taken are presumed to be consistent with the National Contingency Plan unless otherwise shown, while actions of private parties are not entitled to the benefit of this presumption. United States v. NEPACCO, 579 F. Supp. 823, 851 [14 ELR 20212] (W.D. Mo. 1984). In this case, Dade County, pursuant to a cooperative agreement, performed the cleanup at the Miami Drum site. Although the cleanup may have occurred under the auspices of the federal government, the United States may not enjoy a presumption of consistency with the National Contingency Plan when it did not in fact perform the cleanup itself. Stated another way, any presumption of regularity or correctness which the United States enjoys may not automatically be imputed to those third parties who perform cleanups on its behalf. In view of the fact that the EPA did not perform the cleanup here, Plaintiff is not entitled to a presumption of consistency with the National Contingency Plan. Instead, Plaintiff will bear the burden of proving that the costs incurred by Dade County and for [17 ELR 20544] which it reimbursed Dade County were consistent with the National Contingency Plan. UPON the foregoing, it is thereupon ORDERED AND ADJUDGED that the rulings set out herein shall constitute the law of the case and will apply pre-trial, during trial, and post-trial unless specifically modified by Order of this Court. 1. EPA's response activities under CERCLA are financed by Hazardous Substance Response Trust Fund ("Superfund") established by Section 221 of CERCLA, 42 U.S.C. § 9631. 2. As Congressman Florio remarked at the time of CERCLA's enactment: "To insure the development of a uniform rule of law, and to discourage business dealing in hazardous substances from locating primarily in states with more lenient laws, the bill will encourage the further development of a Federal common law in this area." 126 Cong. Rec. H11787 (daily ed. Dec. 3, 1980). 3. SARA provides that its effective date shall be the date of its enactment. See Section 4 of SARA. 4. The committee report on S. 1480 repeatedly refers to a number of aims of the broad liability standard: (1) to provide an incentive for maximum care in the prevention of releases; (2) to assure that responsible parties bear the full cost of their activities; (3) to encourage the internalization of health and environment costs; (4) to encourage compensation of innocent victims by removing difficult proof burdens; (5) to place incentives for greater care on the parties with the best knowledge of risks inherent in the wastes and in the best position to control and supervise their disposal; (6) to spread costs; and (7) to encourage efficient resource allocation. In justifying the seemingly harsh liability standard, the Committee compared the hazardous waste situation to abnormally dangerous activities and products liability, where strict liability is generally applied. See S. Rep. No. 848, 96th Cong., 2d Sess. 12-15, 31-34 (1980). 5. Although Plaintiff has requested an early determination as to the proper standard of proof vis-a-vis divisibility and, further, the proper bases for apportionment if applicable, these issues are premature. First, divisibility is obviously a fact-laden question that must be determined on a case by case basis. Second, a court need not reach the question of apportionment under Chem-Dyne unless and until defendant meets its burden regarding divisibility. 6. The legislative history of CERCLA suggests that an indivisible harm at hazardous waste sites is the situation "where manyparties have contributed to the contamination or other endangerment and there are no reliable records indicating who disposed of the hazardous waste or in what quantities." 126 Cong. Rec. H11,788 (daily ed. Dec. 3, 1980). 7. While both sides here agree that a right to contribution exists under CERCLA, the Court is cognizant of the fact that these Defendants have no real incentive to challenge such a right, given the pendency of their action for contribution against more than 200 potentially responsible generator third party defendants. 8. See discussion of joint and several liability, supra. Although the Court has not ruled that joint and several liability may be imposed because a right to contribution exists (for that would be a "dog wagging the tail" analysis), the Court notes that several state courts have held that the rationale against imposing joint and several liability is no longer viable where a right to contribution exists. See Velsicol Chem. Corp. v. Rowe, 543 S.W.2d 337, 343 (Tenn. 1976); Thorson v. City of Minot, 153 N.W.2d 764, 773 (N.D. 1967); Landers v. East Texas Saltwater Disposal Co., 151 Tex. 251, 257, 248 S.W.2d 731, 734 (1952). 9. As previously noted, Plaintiffs allege that this action involves three of these four classifications; namely, past owners, generators and transporters. 10. Defendants argue that courts have imposed a more liberal causation standard in § 107 actions only to spur prompt implementation of remedial work at a given site. Because the cleanup in this case has already occurred, Defendants claim, a liberal causation standard is unnecessary to effectuate the goals of CERCLA. Expedient cost recovery is as important a goal under CERCLA as expedient cleanup of toxic waste sites. The Superfund does not have infinite resources to draw upon, but must be continually replenished in order to meet its goals. 11. Although no appellate court to date has reached the constitutional issue, several district courts have upheld the facial constitutionality of retroactive application of CERCLA. See, e.g., United States v. Ward, 618 F. Supp. 884 [16 ELR 20127] (E.D.N.C. 1985); United States v. Ottati and Goss, 630 F. Supp. 1361 [16 ELR 20763] (D.N.H. 1985); United States v. Shell Oil Co., 605 F. Supp. 1064 [15 ELR 20337] (D. Colo. 1985); United States v. Conservation Chemical Co., 589 F. Supp. 59 [14 ELR 20207] (W.D. Mo. 1984). 12. Indeed, Plaintiff contends that an "as applied" challenge is impermissible within the context of a due process claim, citing, Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 729-30 (1984); Secretary of Agriculture v. Central Roig Refining Co., 338 U.S. 604, 616-19 (1950); Wickard v. Filburn, 317 U.S. 111, 129-30 (1942). 13. This Order does not purport to encompass any constitutional issues not raised by the parties and/or not addressed by the Court herein. 17 ELR 20539 | Environmental Law Reporter | copyright © 1987 | All rights reserved |