United States v. South Carolina Recycling and Disposal, Inc.

No. 80-1274-6 (653 F. Supp. 984 at 1006) (D.S.C. November 22, 1985)

The court awards the United States and South Carolina the costs for their removal action at the Bluff Road site under the Comprehensive Environmental Response, Compensation, and Liability Act. The court holds that defendants are liable to the United States for cleanup costs and administrative, investigative, and legal expenses, and are liable to South Carolina for administrative expenses not reimbursed by the federal government. The court refuses to award plaintiffs prejudgment interest where there is no evidence that defendants have been recalcitrant, deceptive, or unreasonable. The court holds that defendants are jointly and severally liable to the United States for $1,065,910.92 and to South Carolina for $93,000.

[Other decisions in this litigation are published at 14 ELR 20272 and 20895, and 17 ELR 20845, [second opinion] and 20847.]

Counsel for Plaintiff
F. Henry Habicht II
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2701

Counsel for Defendant
Reece Williams
Robinson, McFadden, Moore, Pope, Williams, Taylor & Brailsford
Suite 600, Jefferson Sq., P.O. Box 944, Columbia SC 29202
(803) 779-8900

[17 ELR 20843]

SIMONS, District Judge.

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

This action was brought by plaintiff United States pursuant to Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9607, to recover costs of removing hazardous substances from the surface of the Bluff Road site, a hazardous waste site located near Columbia, South Carolina. The State of South Carolina entered the action as plaintiff-intervenor [17 ELR 20844] and also seeks to recover costs associated with the Bluff Road site.

On February 21, 1984, this court entered Summary Judgment against all defendants except Columbia Organic Chemical Company ("COCC"), holding the defendants jointly and severally liable for costs incurred by the federal and state governments in cleaning up the Bluff Road site. After a bench trial on the issue of COCC's liability, this court entered an Order on August 28, 1984, finding COCC jointly and severally liable. The Orders of February 21, 1984 and August 28, 1984 did not treat the amount of recovery to which plaintiffs are entitled because the complexity of the cleanup hindered plaintiff's efforts to assemble adequate cost data.

Now before the court are Motions for Summary Judgment filed by plaintiff and plaintiff-intervenor as well as Cross-Motions for Summary Judgment filed by defendants Monsanto Company, Allied Corporation, Aquair Corporation, and EM Industries, Inc. on the issue of the recovery available under CERCLA.¹ Defendants argue that the court should limit the plaintiffs' recovery to $424,000.00, representing the difference between the $519,000.00 paid by the government to the contractor which performed the cleanup of the site and the $95,000.00 received in settlement from former defendant Eaton Corporation.² The government contends that, in addition to amounts paid to the cleanup contractor, discounted by the Eaton settlement, it is entitled under CERCLA to recover administrative, investigative, and legal costs associated with the cleanup and this litigation. Plaintiffs also urge that the government is entitled to prejudgment interest.

In the main, this court finds plaintiffs' legal arguments persuasive and, therefore, denies defendants' motions. Moreover, reviewing the record in a light most favorable to defendants, this court concludes that there are no material issues of fact in dispute with respect to the amount of costs incurred, and that, therefore, Summary Judgment should be granted in plaintiffs' favor on the issue of costs. For reasons noted later in this Order, the court concludes that the facts of this case do not warrant the imposition of pre-judgment interest.

BACKGROUND

In June of 1984, before filing its Motion for Summary Judgment, the United States delivered to each defendant a detailed summary of the United States' costs relating to the Bluff Road cleanup. Defendants were informed that the documents underlying the summary were voluminous but would be made available for inspection upon request by defendants, and that the United States would consider any corrections, modifications, or comments that defendants might have in determining the final cost figure for the Bluff Road cleanup. In August of 1984, the United States, having received no requests, challenges, or comments from defendants relating to the cost summary, filed for Summary Judgment on the issue of costs. Attached to the United States' Motion was the cost summary delivered to defendants for comment.

At a hearing on August 28, 1984, the United States supplemented its Motion with affidavits of record custodians from both the United States Environmental Protection Agency and the United States Department of Justice. Over objection by defendants, the court received the United States' cost summary and supporting affidavits as evidence.³ The South Carolina Department of Health and Environmental Control ("the State") also sought payment of administrative expenses associated with the Bluff Road cleanup.⁴ The court granted defendants an additional sixty (60) days in which to conduct discovery of plaintiffs' underlying cost information for the purpose of identifying issues of fact. Defendants were given fifteen (15) days after expiration of the discovery period to bring any issues of fact to the court's attention. Although the court is aware that some limited discovery was undertaken by defendants, defendants have not filed papers with the court showing a disputed issue of material fact within the requisite time frame.

Thus, in the absence of a showing of disputed issue of material fact, the court accepts plaintiffs' statement of costs incurred as true and accurate.

The United States initially stated costs of $1,157,242.89 in its cost summary. In papers subsequently filed with the court, the United States adjusted that figure, reducing an amount that had been overstated in the summary, calculating in an amount listed in the summary as committed but not yet paid, which was subsequently paid, and reducing the total by the amount received in settlement from Eaton Corporation. The United States' adjusted cost figure is $1,065,910.92.⁵ This figure represents the cost of the cleanup itself, as well as administrative, investigative, and legal expenses associated with the cleanup and recovery of the federal government's costs. The State claims an additional $93,000 in administrative expenses which were not reimbursed by the federal government. Because the court accepts these cost figures as true, the only inquiry remaining is whether the government is entitled, as a matter of law, to recover all of these costs.

SCOPE OF RECOVERY

Persons held liable under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), are responsible for "all costs of removal or remedial action incurred . . . not inconsistent with the national contingency plan ["NCP"] . . ." (Emphasis added). The statute limits the grounds for contesting government costs to the issue of consistency with the NCP, and places the burden of proof with respect to that issue on defendants. A recent decision in United States v. Northeastern Pharmaceutical and Chemical Company, Inc., ("NEPACCO"), [17 ELR 20845] 579 F. Supp. 823 (W.D.Mo.1984), is persuasive in this regard:

Defendants argue that the plaintiff failed to prove that the costs incurred were reasonable and "not inconsistent with the national contingency plan." Initially, the Court finds that the burden of proving inconsistency with the national contingency plan was that of the defendants. This conclusion is evident from the language of the statute. To give meaning to every term in the statute, the Court reads the insertion of the word "not" immediately prior to "inconsistent" to mean that the defendants are presumed liable for all response costs incurred unless they can overcome this presumption by presenting evidence of inconsistency. The content of section 107(a)(4)(B) lends support to this conclusion in stating that responsible parties are liable for "any other costs of response incurred by any other person consistent with the national contingency plan. . . ." (emphasis added). On its face, section 107(a)(4)(B) intends that a different standard apply to cost recovery by nongovernmental entities and that such entities must affirmatively show that their actions were consistent. . . . Congress had already made provision for the reasonableness of actions taken by the government. . . . Reasonableness is conclusively presumed to have been built into the plan. . . . As long as the actions taken by the government were in harmony with the national contingency plan, the costs incurred pursuant to those actions are presumed to be reasonable and therefore recoverable. If Congress had intended otherwise, they would have merely stated in section 107(a)(4)(A), "all reasonable costs," instead of the present language of "all costs."

Id. at 850-51. In this case, defendants have failed to prove that any of plaintiffs' costs were inconsistent with the NCP and have not identified any issue of fact with respect to those costs. Consequently, all costs within the scope of recovery under Section 107(a) of CERCLA will be allowed.

In NEPACCO, the Honorable Russell G. Clark concluded that CERCLA specifically allows for the recovery of all litigation costs, including attorney fees, and administrative and investigative costs associated with cleanups. Id. at 851-52. While this court is not without some misgivings about awarding attorney fees to the government for the services of its own lawyers, the broad language of the statute and the cogency of Judge Clark's comments in the NEPACCO opinion are persuasive. As noted above, under Section 107(a) of CERCLA, responsible parties are liable for "all costs of removal or remedial action. . . ." 42 U.S.C. § 9607(a). "Remove" or "removal" is defined by Section 101(23) of CERCLA to include "action taken under Section 9604(b). . . ." 42 U.S.C. § 9601(23). That provision, in turn, provides, in pertinent part, as follows:

Whenever the President is authorized to act pursuant to subsection (a) of this section . . . [he] may undertake such planning, legal, fiscal, economic, engineering, architectural, and other studies or investigations as he may deem necessary or appropriate to plan and direct response actions, to recover the costs thereof, and to enforce the provisions of this chapter.

42 U.S.C. § 9604(b) (emphasis added). Because the response actions at the Bluff Road site were taken pursuant to Section 104(a) of CERCLA, this court concludes that all costs associated with the cleanup and this litigation are recoverable.

Plaintiffs seek an award of prejudgment interest on these amounts. The parties agree that CERCLA does not specifically address the issue of prejudgment interest. In the absence of express statutory provision, the question must be resolved by the courts. This court recognizes that some CERCLA actions may present circumstances in which an award of prejudgment interest is appropriate. See NEPACCO, 579 F. Supp. at 852. In this case, however, there is no indication that the defendants have been recalcitrant, deceptive or unreasonable. Moreover, defendants have not sought to delay either the cleanup activities or the progress of this case. Under such circumstances, this court declines to award prejudgment interest.

Accordingly, defendants are hereby adjudged liable, jointly and severally, to the United States in the amount of $1,065,910.92 and to the State in the amount of $93,000.00. The court understands that certain additional costs are as yet incalculable, and, therefore, grants plaintiffs sixty (60) days to file and serve affidavits supplementing the amount of the judgments entered hereby. Defendants are directed to file any opposing affidavits or other evidence concerning such additional costs within 30 days after plaintiff's affidavits are filed.

AND IT IS SO ORDERED.⁶

1. COCC joined in these defendants' Motion after it was filed.

2. Defendants mischaracterize the relief in question as "damages." The term "damages" is ordinarily associated with legal remedies. Not only does § 107(a) of CERCLA refer to "costs" rather than "damages", but the type of relief authorized by the statute is equitable restitution — a remedy designed to return plaintiffs to the financial position they were in before incurring cleanup costs. See Porter v. Warner Holding Co., 328 U.S. 395, 66 S. Ct. 1086, 90 L.Ed. 1332 (1946); United States v. Long, 537 F.2d 1151, 1153-54 (4th Cir.1975), cert. denied, 429 U.S. 871, 97 S. Ct. 185, 50 L. Ed. 2d 151 (1976). See also United States v. Northeastern Pharmaceutical and Chemical Company, Inc., 579 F. Supp. 823 (W.D.Mo.1984).

3. In this court's view, the cost documents which underlie the government's cost summary are records of regularly conducted activity, which are subject to the hearsay exception provided by Fed.R.Evid. 803(6). The Federal Rules recognize the utility and admissibility of evidence summaries in circumstances such as this:

The contents of voluminous writings, recordings, or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at [a] reasonable time and place. The court may order that they be produced in court.

Fed.R.Evid. 1006. Pursuant to Rule 1006, summaries of evidence should be admissible whenever the underlying evidence would itself be admissible. See Ford Motor Co. v. Auto Supply Co., Inc., 661 F.2d 1171 (8th Cir.1981); United States v. Foley, 598 F.2d 1323 (4th Cir.1979); United States v. Consolidated Edison Co., Inc., 580 F.2d 1122 (2nd Cir.1978). Because plaintiff's cost exhibit summarizes admissible documentary evidence and was properly authenticated by custodial affidavits, the summary and affidavits were admitted as evidence.

4. The State followed up its demand at the hearing with a Motion for Summary Judgment filed September 18, 1984.

5. The figure does not include some expenses which are as yet incalculable. Specifically, the degree to which the federal and state governments will reimburse the cleanup contractor for cost overruns has not yet been resolved, and the amount of administrative expense incurred by the State and reimbursed by EPA has not been calculated. Moreover, federal administrative and legal costs which have accrued from March of 1984, the date of the United States' last computations, up until the date of this judgment have not yet been calculated.

6. It is noted that this court has withheld executing and filing this Order for a considerable period of time awaiting the Eighth Circuit Court of Appeals' decision in United States v. Northeastern Pharmaceutical and Chemical Company, Inc., 579 F. Supp. 823 (W.D.Mo.1984) inasmuch as the court had received information that this case had been duly appealed to the Eighth Circuit. Since the Eighth Circuit has not at this time issued its Order in that case, the court has decided to go forward and execute and file the within Order.