United States v. Nicolet, Inc.

No. 85-3060 (E.D. Pa. December 31, 1986)

The court holds that a defendant in a cost recovery action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) may bring compulsory counterclaims against the United States pursuant to the Federal Tort Claims Act (FTCA). The court first holds that it lacks jurisdiction under the Tucker Act to hear defendant's counterclaims. Defendant's tort and declaratory relief claims are not authorized, since the Tucker Act authorizes suits only for monetary relief and defendant's claims seeking damages over $10,000 may be brought only in Claims Court. The court holds that defendant's counterclaim seeking declaratory relief is not foreclosed by the Administrative Procedure Act, 5 U.S.C. § 702, which waives the United States' sovereign immunity only for actions seeking nonmonetary relief but does not provide jurisdiction if "any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought." Both the Tucker Act and the FTCA expressly bar the declaratory relief sought by defendant. The court holds that defendant's declaratory relief claim is also barred by CERCLA, which waives the United States' sovereign immunity only where it may be liable for removal and remedial costs, response costs, and natural resource damages. The court therefore holds that CERCLA bars all counts in defendant's counterclaim except the claim for response costs because they do not fall within the waiver provision of CERCLA § 107(g).

The court holds that defendant's counterclaim in which it seeks recoupment of response costs may proceed to the extent that it constitutes a compulsory counterclaim. The court holds that defendant may bring its tort counterclaims pursuant to the FTCA. These counterclaims are not barred by the FTCA's requirement that claimants first file an administrative claim before the appropriate federal agency. The court holds that defendant's FTCA counterclaims are excused from this requirement if they are compulsory. The court concludes that defendant's counterclaims alleging deprivation of property, trespass, and negligence are compulsory since they arose out of the same transaction and occurrence that gave rise to the United States' cause of action.

[The court's rulings on the United States' motion for reconsideration and motion for a protective order appear at 17 ELR 21088 and 21091.]

Counsel for Plaintiff
Margaret L. Hutchinson, James G. Sheehan, Ass't U.S. Attorneys
601 Market St., Rm. 3310, Philadelphia PA 19106
(215) 597-2556

David E. Street
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-3977

Counsel for Defendant
Joseph G. Manta, Joel Schneider
Manta & Welge
1515 Market St, Suite 1818, Philadelphia PA 19102
(215) 564-4388

[17 ELR 21085]

Broderick, J.:

Memorandum

This is an action brought by the United States pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. ("CERCLA"), against Nicolet, Inc. to recover approximately $700,920.96 expended by the United States Environmental Protection Agency ("EPA") in removal and response costs associated with two large asbestos containing waste piles known as the "Locust Street Pile" and the "Plant Pile" on Nicolet's property in Ambler, Pennsylvania. The complaint also seeks a declaratory judgment pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, declaring that Nicolet should be held liable for any future costs incurred by the United States in covering asbestos at the site. Nicolet answered the complaint and filed a six-count counterclaim against the United States. The United States has filed a motion to dismiss the counterclaim, which Nicolet opposes. For the reasons that follow, the United States' motion will be granted in part and denied in part.

In Count I of the counterclaim, Nicolet seeks a declaratory judgment declaring that Nicolet has not violated CERCLA; that the United States violated Nicolet's constitutional rights; that the United States' actions were illegal, arbitrary, capricious, and that Nicolet is entitled to restitution for all costs incurred in connection with defending this action. In Count II, Nicolet alleges that it has been deprived of its property without due process of law. In Count III, Nicolet seeks restitution, including response costs, "for all costs, expenses and fees which Nicolet expended in connection with plaintiff's illegal, unnecessary and unwarranted actions." In Count IV, Nicolet seeks damages for the United States' alleged unlawful trespass onto Nicolet's property. In Count V, Nicolet alleges that the United States' actions constitute a nuisance. In Count VI, Nicolet alleges that the United States was negligent. In Counts II through VI, Nicolet seeks damages in excess of $10,000.00. Nicolet asserts that this Court has jurisdiction over the counterclaims under (1) federal question jurisdiction, 28 U.S.C. § 1331; (2) the Declaratory Judgment Act, 28 U.S.C. § 2201; (3) the Tucker Act, 28 U.S.C. §§1346(a)(2) and 1491(a); (4) the Administrative Procedure Act, 5 U.S.C. § 701 et seq.; (5) CERCLA; and (6) the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b) and 2674.

The United States asserts that the claims set forth in Nicolet's counterclaim should be dismissed on the ground that the Court lacks jurisdiction since the counterclaim seeks affirmative relief against the United States and sovereign immunity bars jurisdiction over the counts in the counterclaim. The United States further asserts that the counterclaims should be dismissed for failure to state a claim.

Sovereign Immunity

As stated by the United States Supreme Court in United States v. Testan, 424 U.S. 392, 96 S. Ct. 948 (1976):

[17 ELR 21086]

It has long been established, of course, that the United States, as sovereign, "is immune from suit save as it consents to be sued . . . and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S., at 586, 61 S. Ct. at 769.

424 U.S. at 399, 96 S. Ct. at 953. Thus, suit against the United States can only be maintained in those instances where the United States has waived its sovereign immunity. A waiver of sovereign immunity, however, "cannot be implied but must be unequivocally expressed." United States v. King, 395 U.S. 1, 4, 89 S. Ct. 1501, 1503 (1969).

The United States does not waive sovereign immunity by instituting an action or proceeding against a party. It does, however, subject itself to

a compulsory counterclaim asserting matter of recoupment, which arises out of the transaction or occurrence that is the subject matter of the sovereign's suit, and is used to defeat or diminish recovery by the sovereign.

3 Moore's Federal Practice P13.28 at 13-161-13-162; see United States v. 2,116 Boxes of Boned Beef, 726 F.2d 1481, 1490 (10th Cir. 1984). Only a compulsory counterclaim seeking recoupment or a counterclaim pursuant to a statutory waiver of immunity can be asserted as a counterclaim against the sovereign. See The Thekla, 266 U.S. 328, 45 S. Ct. 112 (1924). Therefore, Nicolet's counterclaim cannot be maintained unless it is a compulsory counterclaim which seeks recoupment or the United States has expressly consented to be sued on the claims asserted in the counterclaim. See United States v. Shaw, 309 U.S. 495, 60 S. Ct. 659 (1940).

Federal Question Jurisdiction and the Declaratory Judgment Act

It is well settled that 28 U.S.C. § 1331 is a jurisdictional statute, but it is not a waiver of the United States' sovereign immunity. Army and Air Force Exchange Service v. Sheehan, 456 U.S. 728, 102 S. Ct. 2118 (1982). A waiver of sovereign immunity must come from the statute giving rise to the cause of action. Similarly, the Declaratory Judgment Act, 28 U.S.C. § 2201, does not constitute a waiver of sovereign immunity. Schilling v. Rogers, 363 U.S. 666, 677, 80 S. Ct. 1288, 1296 (1960). Therefore, this Court only has subject matter jurisdiction over the six counts in Nicolet's counterclaim pursuant to sections 1331 or 2201 if an express waiver of the United States' sovereign immunity is contained in the statutes invoked by Nicolet as a basis for its counterclaim.

The Tucker Act

The Tucker Act, 28 U.S.C. §§ 1346(a)(2) and 1491(a), grants concurrent original jurisdiction in the district courts and the United States Claims Court over civil actions against the United States not exceeding $10,000.00 founded upon, inter alia, the Constitution, any Act of Congress, any regulation of an executive department or other damage claims not sounding in tort. 28 U.S.C. § 1346(a)(2). See Commonwealth of Pennsylvania v. National Association of Flood Insurers, 520 F.2d 11, 25 (3d Cir. 1975). Because Count IV (trespass), Count V (nuisance) and Count VI (negligence) of the counterclaim are purely tort claims, they may not be brought pursuant to the Tucker Act. Similarly, because Count II (deprivation of property), Count III (restitution) as well as Counts IV, V and VI seek damages in excess of $10,000.00, jurisdiction is only proper in the Claims Court and they may not be pursued in this Court. Hahn v. United States, 757 F.2d 581, 586 (3d Cir. 1985), Zimmerling v. Marsh, 591 F. Supp. 537, 542 (W.D. Pa. 1984), aff'd, 769 F.2d 745 (3d Cir. 1985); Keller v. Merit Systems Protection Board, 679 F.2d 220, 222 (11th Cir. 1982). Finally Count I of Nicolet's counterclaim seeks declaratory relief. The Tucker Act authorizes suits against the United States only for money damages, not for declaratory or other relief. Lee v. Thornton, 420 U.S. 139, 95 S. Ct. 853 (1975); C. Wright, A. Miller, & A. Cooper Federal Practice and Procedure § 3657 at 278-79 & n.23. Therefore, under the Tucker Act, this Court is without jurisdiction as to all six of the counts in Nicolet's counterclaim.

The Administrative Procedure Act

Nicolet contends that its counterclaims are cognizable under the Administrative Procedure Act ("APA") because the United States has waived sovereign immunity in 5 U.S.C. § 702. Section 702 provides:

A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party. . . . Nothing herein . . . (2) confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.

It is clear that when section 702 applies, it constitutes a waiver of sovereign immunity only as to actions seeking nonmonetary relief. Jaffee v. United States, 592 F.2d 712, 719 (3d Cir.), cert. denied, 441 U.S. 961 (1979). Therefore, Count II (deprivation of property), Count III (restitution), Count IV (trespass), Count V (nuisance) and Count VI (negligence) of the counterclaim, which all seek monetary relief, do not fall within the provisions of section 702 waiving sovereign immunity and may not be asserted under the APA. The declaratory relief requested in Count I, however, being nonmonetary is not foreclosed by the nonmonetary limitation in section 702. Jaffee, 592 F.2d at 719. As the Third Circuit stated in Jaffee:

We . . . hold that section 702, when it applies, waives sovereign immunity in "nonstatutory" review of agency action under section 1331. As the House Report shows, Congress amended section 702 with a specific purpose of waiving sovereign immunity in equitable actions brought under section 1331.

592 F.2d at 718. The Third Circuit further explained:

These suits are called "nonstatutory" because they are not brought under the statutes that specifically provide for review of agency action.

92 F.2d at 718, n. 12. Accord Hahn v. United States, 757 F.2d 581, 588 (3d Cir. 1985) (fifth amendment claims are within terms of federal question jurisdiction and section 702 provides corresponding waiver of sovereign immunity). B.K. Instrument, Inc. v. United States, 715 F.2d 713, 724-25 (2d Cir. 1983). This jurisdictional route pursuant to sections 1331 and 702 may not be used, however, if "any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought." 5 U.S.C. § 702(2). This Court must, therefore, examine the relevant statutes in order to determine whether the declaratory relief sought by Nicolet in Count I of the counterclaim is expressly or impliedly proscribed.

The statutes relevant to the Court's determination appear to be the Federal Tort Claims Act ("FTCA"), the Tucker Act and CERCLA. As heretofore pointed out, under the Tucker Act, the United States has not waived immunity in actions seeking declaratory relief. Lee v. Thornton, 420 U.S. 139, 95 S. Ct. 853 (1975). Furthermore, the FTCA's waiver of sovereign immunity extends only to actions seeking monetary, not equitable, relief. Hatahley v. United States, 351 U.S. 173, 76 S. Ct. 745 (1956). Therefore, the combination of sections 1331 and 702 does not confer jurisdiction in this Court over Nicolet's request for declaratory relief in light of the prohibition against an award of equitable relief against the United States pursuant to the FTCA and the Tucker Act. Therefore, the counterclaim seeking declaratory relief against the United States may only proceed if it is not also barred, expressly or impliedly, by CERCLA.

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

Congress enacted CERCLA in 1980 to give the EPA the authority to conduct cleanup actions in response to environmental hazards. There is a limited waiver of sovereign immunity in CERCLA, 42 U.S.C. § 9607(g), which provides:

Each department, agency or instrumentality of the executive, legislative, and judicial branches of the Federal Government shall be subject to, and comply with, this chapter in the same manner and to the same extent, both procedurally and substantively, as any nongovernmental entity, including liability under this section.

[17 ELR 21087]

See United States of America v. Union Gas Co., 792 F.2d 372 [16 ELR 20818] (3d Cir. 1986), petition for cert. filed October 8, 1986. Liability under CERCLA is detailed in section 107(a), 42 U.S.C. § 9607(a), which provides that parties subject to the provisions of CERCLA shall be responsible for:

(A) all costs of removal or remedial action incurred by the United States Government or a State not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan; and

(C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release.

Thus, the United States has waived sovereign immunity under CERCLA only in the limited circumstances where it may be liable for removal and remedial costs, response costs and natural resource damages. See Senate Comm. on Environment and Public Works, Comprehensive Environmental Response, Compensation, and Liability Act of 1980, S. Rep. No. 1480, 97th Cong., 2d Sess., at vol. 2, p. 339. Although it may be argued that that portion of Count III of Nicolet's counterclaim seeking response costs from the United States falls within the waiver provisions of section 107(g) and is not barred by the doctrine of sovereign immunity, it is clear, as heretofore pointed out, that recoupment claims which arise out of the transaction or occurrence that is the subject matter of the sovereign's suit, and are used to defeat or diminish recovery by the sovereign are not barred by sovereign immunity. However, the declaratory relief in Count I may not proceed pursuant to CERCLA. Although there are no express words of exclusivity, declaratory relief is impliedly proscribed under CERCLA because Congress carefully constructed very limited areas of liability which do not include declaratory relief. Review of the Legislative History reveals that Congress wanted to limit liability under CERCLA to specific, narrowly defined costs and damages. Furthermore, it can be implied from the provisions in section 107(a) providing for removal and remedial costs, response costs and natural resource damages that Congress did not intend equitable actions for declaratory relief to be among the "damages" available pursuant to CERCLA. Therefore, all counts in Nicolet's counterclaim, except the portion of Count III seeking response costs, are barred by CERCLA because they do not fall within the waiver provision of section 107(g). See B.R. Mackay & Sons, Inc. v. United States, 633 F. Supp. 1290, 1296 n.9 (D. Utah 1986) (section 107(g) does not provide waiver of sovereign immunity for "breaches of CERCLA"); Jefferson County, Missouri v. United States, 644 F. Supp. 178, 181 [17 ELR 20122] (E.D. Mo. 1986) (section 107(g) does not waive sovereign immunity or grant jurisdiction for injunctive relief by a private party against the EPA). It is clear, therefore, that Nicolet's counterclaim for declaratory relief cannot proceed under the jurisdictional grant of section 1331 and the waiver of sovereign immunity in section 702 in light of this Court's determination that declaratory relief is impliedly forbidden by CERCLA.

Furthermore, the declaratory relief sought by Nicolet in Count I of the counterclaim is purely redundant and better legal reasoning appears to support the striking of the redundant counterclaim in this case. See 3 Moore's Federal Practice P13.07. As Judge Clark stated in Libbey-Owens-Ford Glass Co. v. Sylvania Industrial Corp., 154 F.2d 814 (2d Cir.), cert. denied, 328 U.S. 859 (1946):

The issue which has somewhat divided the courts is not whether there should be a merely redundant counterclaim — for which none of the courts contend — but as to the time of deciding this point, in fact, whether or not the counterclaim should be held until trial to see if then there arises even an "infinitessimal" need for relief . . .

Id. at 816 n.3. Under the circumstances presented in this proceeding, this Court perceives no "infinitessimal" need for a redundant counterclaim.

The Federal Tort Claims Act (FTCA)

The Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 1346(b) and § 2671 et seq. gives the district courts jurisdiction over actions against the United States for money damages

for injury or loss of property, . . . caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment . . .

Only actions for money damages fall within its scope, Hatahley v. United States, 351 U.S. 173, 76 S. Ct. 745 (1956), and the FTCA does not extend to actions based on nuisance. Dalehite v. United States, 346 U.S. 15, 73 S. Ct. 956, reh'g denied, 346 U.S. 841 (1953). Count I of the counterclaim, which seeks declaratory relief, and Count V, based on nuisance, therefore, cannot be brought pursuant to the FTCA.

As heretofore pointed out, the United States, by instituting an action or proceeding against a party, waives its sovereign immunity as to a compulsory counterclaim asserting a matter of recoupment which arises out of the transaction or occurrence that is the subject matter of the sovereign's suit and is used to defeat or diminish recovery by the United States. 3 Moore's Federal Practice P13.28 at 13-161-13-162; United States v. 2,116 Boxes of Boned Beef, 726 F.2d 1481, 1490 (10th Cir.), cert. denied sub nom. Jarboe-Lackey Feedlots, Inc. v. United States, 469 U.S. 825 (1984); Jicarilla Apache Tribe v. Andrus, 687 F.2d 1324, 1344 [13 ELR 20445] (10th Cir. 1982). Frederick v. United States, 386 F.2d 481, 488 (5th Cir. 1967). In Count III of its counterclaim, Nicolet seeks "costs, expenses and fees includ[ing] but . . . not limited to response and remedial costs, attorneys' fees and expert fees." Insofar as Count III seeks to defeat all or part of the United States' claim, seeks relief that is similar in kind and nature to that sought by the United States, does not exceed the amount sought by the United States and arises out of the same transaction and occurrence as that which gives rise to the United States' claim, it may proceed. The counterclaims filed in Count II (deprivation of property), Count IV (trespass) and Count VI (negligence) do not fall within the category of recoupment actions discussed above but rather seek affirmative relief against the United States on tort theories. A counterclaim not seeking recoupment may be filed against the United States if that counterclaim falls within an independent statutory waiver of sovereign immunity. Frederick v. United States, 386 F.2d 481, 488 (5th Cir. 1967). If a counterclaim "arises from a different transaction or occurrence, then it is in effect an independent suit and it may be asserted . . . only if the government has waived its sovereign immunity." 6 C. Wright & A. Miller Federal Practice and Procedure § 1427 at 140-41; In re Monongahela Rye Liquors, Inc., 141 F.2d 864 (3d Cir. 1944); United States v. Gregory Park, Section II, Inc., 373 F. Supp. 317, 351 (D.N.J. 1974). Therefore, because the United States has waived its immunity to suit in tort actions pursuant to the FTCA, Nicolet's tort counterclaims will be permitted if they have been properly plead pursuant to the FTCA.

The United States asserts that the tort counterclaims are barred by section 2675(a) of the FTCA which requires the filing of an administrative claim before the appropriate federal agency prior to bringing an action pursuant to the FTCA. Section 2675(a) provides, in part:

§ 2675. Disposition by federal agency as prerequisite; evidence

(a) An action shall not be instituted upon a claim against the United States for money damages for injury or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, unless the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing and sent by certified or registered mail. . . . The provisions of this subsection shall not apply to such claims as may be asserted under the Federal Rules of Civil Procedure by third party complaint, cross-claim, or counterclaim.

Several courts have held that in light of the last sentence of section 2675(a) and the language of Fed. R. Civ. P. 13(a) governing compulsory counterclaims, compulsory counterclaims brought pursuant to the FTCA may be excused from the requirement of filing an administrative claim. Spawr v. United States, 796 F.2d 279, 281 (9th Cir. 1986); United States v. Chatham, 415 F. Supp. 1214, 1216 (N.D. Ga. 1976); United States v. Taylor, 342 F. Supp. 715, 717 (D. Kan. 1972). In Frederick v. United States, supra, an action instituted by the United States wherein the defendant counterclaimed [17 ELR 21088] against the United States, the Fifth Circuit Court of Appeals considered a statute similar to section 2675(a). The Frederick court examined 28 U.S.C. § 2406, which requires that a party prove that his claim for a credit against the United States has been disallowed by the General Accounting Office. The Frederick Court stated:

As we construe this section [2406], it has no application where the sovereign already has laid aside its immunity by statute or by filing suit. A claim which otherwise qualifies to be filed as a compulsory counterclaim against the government is not subject to § 2406. . . . Section 2406 does have application where the claim is asserted as a permissive counterclaim under Rule 13(b).

* * *

It would be anomalous to hold that a defendant, in court in an action he did not bring, is required to plead a counterclaim against the government under Rule 13(a) but that once pleaded, his counterclaim is subject to dismissal on the ground that he had not, before being sued, taken affirmative action to seek an administrative "credit" of the General Accounting Office.

386 F.2d at 489 (emphasis added) (citations omitted). This Court concludes, therefore, that under the circumstances of this action which was instituted by the United States, Nicolet's counterclaims brought pursuant to the FTCA may be excused from the requirement of filing an administrative claim pursuant to section 2675(a) only if those counterclaims are compulsory. As will be discussed, the Court has determined that Counts II, IV and VI of the counterclaim are compulsory counterclaims and will, therefore, not be dismissed.

The test for determining if a counterclaim is a compulsory counterclaim was set out in Xerox Corp. v. SCM Corp., 576 F.2d 1057 (3d Cir. 1978):

Great Lakes Rubber Corp. v. Herbert Cooper Co., 286 F.2d 631, 634 (3d Cir. 1961), established that the operative question in determining if a claim is a compulsory counterclaim is whether it bears a logical relationship to an opposing party's claim.

[A] counterclaim is logically related to the opposing party's claim where separate trials on each of their respective claims would involve a substantial duplication of effort and time by the parties and the courts. Where multiple claims involve many of the same factual issues, or where they are offshoots of the same basic controversy between the parties, fairness and consideration of convenience and of economy require that the counterclaimant be permitted to maintain his cause of action. Indeed, the doctrine of res judicata compels the counterclaimant to assert his claim in the same suit for it would be barred if asserted separately, subsequently.

Thus, a detailed analysis must be made to determine whether the claims involve: (1) many of the same factual issues; (2) the same factual and legal issues; or (3) offshoots of the same basic controversy.

576 F.2d at 1059. It is clear that Count II (deprivation of property), Count IV (trespass) and Count VI (negligence) of the counterclaim arise out of the same transaction or occurrence that gives rise to the United States' cause of action, i.e., the release and threatened release of hazardous substances from waste piles at Nicolet's site in Ambler, Pennsylvania and the actions taken by the United States to cover these waste piles and otherwise stabilize the site. The United States has already allegedly incurred $700,920.96 in response and removal costs consistent with the national contingency plan. As heretofore pointed out, Counts II, IV and VI of Nicolet's counterclaim sound in tort. Although the United States is acting pursuant to statutory mandate, i.e., CERCLA, its actions are most analogous to tort actions in that they are taken in order to redress an alleged unlawful civil act by a private party. Separate trials of the United States' and Nicolet's claims would involve a substantial duplication of effort and time in that they both arise out of and concern the United States' actions taken to clean up Nicolet's waste piles. The same factual issues will be presented and the counterclaims are offshoots of the same factual controversy between the parties. It is clear that litigating the counterclaims in this statutory enforcement action will introduce some new legal issues. The claims in the counterclaim, however, are logically related to the complaint and will require similar proof regarding the actions taken by the United States, the methods of cleanup used and the costs incurred as a result thereof. The Court finds, therefore, that Count II (deprivation of property), Count IV (trespass) and Count VI (negligence) of the counterclaim are compulsory counterclaims and are excused from the administrative claim requirements of section 2675(a). The United States' motion to dismiss as to Counts II, IV and VI will, therefore, be denied.

Order

AND NOW, this 31st day of December, 1986, upon consideration of the United States' motion to dismiss the counterclaim filed by the defendant Nicolet, Inc., for the reasons set forth in this Court's Memorandum of December 31st, 1986,

IT IS ORDERED:

(1) The United States' motion to dismiss Counts I and V of the counterclaim filed by Nicolet against the United States is GRANTED and Counts I and V of the counterclaim are DISMISSED.

(2) The United States' motion to dismiss Counts II, IV and VI of the counterclaim filed by Nicolet against the United States is DENIED.

(3) The United States' motion to dismiss Count III of the counterclaim filed by Nicolet against the United States, insofar as Count III asserts a claim for recoupment against the United States, is DENIED.