United States v. Ivey

No. 89-CV-71179-DT (E.D. Mich. May 3, 1990)

The court holds that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not authorize service of process in a foreign country. The defendants, who reside in Canada and were served there, are alleged to be owners and operators of the Liquid Disposal, Inc. site in Michigan. Although CERCLA § 113(e) provides for nationwide service of process, it does not authorize foreign service of process. The court notes that it may have personal jurisdiction over the defendants under Michigan's long-arm statute, and requests supplemental briefs on the issue.

Counsel for Plaintiffs
Donald Carr
Land and Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2056

Counsel for Defendants
Jeffrey Haynes
VanderKlot & Haynes
P.O. 980, Bloomfield Hills MI 48013
(313) 540-8388

[20 ELR 20918]

Zatkoff, J.:

Memorandum Opinion and Order

AT A SESSION of said Court, held in the United States Courthouse, in the City of Detroit, State of Michigan, on the 3rd day of May, 1990.

Introduction

This matter is before the Court on defendants' motion to dismiss for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2). Defendants C. Robert Ivey and Ineco, Ltd. assert that this Court lacks jurisdiction over them. They contend that jurisdiction over them, by terms of plaintiff's complaint, is based upon the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., and that CERCLA does not provide for service of process in foreign countries. Therefore, defendants argue since they were served in Canada, this Court lacks personal jurisdiction over them. Plaintiff asserts that this Court has personal jurisdiction over both defendants pursuant to both CERCLA and the Michigan "long-arm" statute. Plaintiff contends that both defendants have sufficient contacts within the State of Michigan to support this Court's jurisdiction.

Background

This action seeks to have persons alleged to be responsible for polluting the Liquid Disposal Inc. (LDI) property pay the costs of cleaning up this Michigan "Superfund" Site. The LDI Site (Site) is listed on the National Priorities List, 40 C.F.R. Part 300, Appendix B. Plaintiff filed this action under CERCLA to recover the costs it has incurred and will incur regarding this cleanup.

Plaintiff alleges that defendants Ivey and Ineco are each liable under CERCLA as the owner or operator of the Site. 42 U.S.C. § 9607. As alleged in plaintiff's complaint, the activities of defendants Ivey and Ineco regarding LDI are interrelated and also involve the activities of defendant Maziv Industries, Ltd.

LDI is a Michigan corporation that conducted its principle business operations at the Site, located at 3901 Hamlin Road, Shelby Township, Macomb County, Michigan. LDI owned the Site from at least 1967 until 1984. Defendant Ivey was President and Director of LDI during the time that hazardous substances were disposed of at the Site. In his capacity as President and Director, Ivey had overall responsibility for the operation and management of the Site.

Defendant Ivey was also the President and Director of Maziv Industries, Ltd., a Canadian corporation, which was the majority shareholder of LDI. Maziv was involved in the operations of LDI through the activities of Defendant Ivey. LDI identified Maziv as its parent corporation. Maziv also held the mortgage to the Site. These activities occurred during the period of time that hazardous substances were disposed of at the Site.

In December of 1986, Ineco began operations at the same business address as Maziv. Two days after Ineco was brought into existence, Maziv assigned to Ineco its rights and interest in LDI, including its shares and the mortgage to the Site. Maziv ceased active operations shortly thereafter. Defendant Ivey is the President and Director of Ineco.

Opinion

Section 113(b) of CERCLA, 42 U.S.C. § 9613(b) provides in part, as follows:

Except as provided in subsections (a) and (h) of this section, the United States district courts shall have exclusive original jurisdiction over all controversies arising under this Act, without regard to the citizenship of the parties or the amount in controversy.

As paragraph 1 of plaintiff's complaint alleges, this action is brought pursuant to CERCLA, and not pursuant to any other state or common law.

Section 113(e) of CERCLA provides for nationwide service of process:

In any action by the United States under this Act, process may be served in any district where the defendant is found, resides, transacts business, or has appointed an agent for the service of process.

42 U.S.C. § 9613(e). Defendants reason that Section 113(e) limits jurisdiction in CERCLA actions to defendants who are found within the territorial boundaries of the United States. Defendants admit they were personally served in Canada, where they are located or reside, but argue that Section 113(e) renders this service meaningless and denies this Court jurisdiction over them.

Before a court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied. "[S]ervice of summons is the procedure by which a court having venue and jurisdiction of the subjective matter of the suit asserts jurisdiction over the person of the party to be served." Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 444-45 (1946).

Thus, before a court may exercise personal jurisdiction over a defendant, there must be more than notice to the defendant and a constitutionally sufficient relationship between the defendant and the forum. There must also be a basis for the defendant's amenability to service of summons. Absent consent, this means there must be authorization for service of summons on the defendant.

Omni Capital International v. Rudolph Wolff & Co., Ltd., 108 S. Ct. 404, 409 (1987).

In this case, the question is whether there is authorization to serve summons. Service of process in a federal action is covered generally by Rule 4 of the Federal Rules of Civil Procedure. Rule 4(f) describes where process "may be served." It authorizes service in the state in which the action is brought, or anywhere else authorized by a federal statute or by the Rules.

The first sentence of the rule [Fed. R. Civ. P. 4(e)] speaks to the ability to serve summons on an out-of-state defendant when a federal statute authorizes such service. The second sentence, as an additional method, authorizes service of summons "under the circumstances" proscribed in a State statute or Rule. Thus, under Rule 4(e), a federal court normally looks either to a federal statute or to the long-arm statute of the State in which it sits to determine whether a defendant is amenable to service, as a prerequisite to its exercise of personal jurisdiction.

(Footnotes omitted). Omni Capital International, 108 S. Ct. at 410.

By its terms, Section 113(e) does not provide for service of process in a foreign country. It allows service only within the United States. Therefore, plaintiff's argument that Section 113(e) of CERCLA authorizes service of summons on an alien defendant is without merit. However, since CERCLA does not authorize service of summons on Ivey and Ineco, it is appropriate to look to the second sentence of Rule 4(e), which points to the long-arm statute of the State in which this Court sits, Michigan.

The Michigan "long-arm" statute sets forth the circumstances under which non-resident individuals, MCLA § 600.705, and corporations, MCLA § 600.715, may be subject to the limited personal [20 ELR 20919] jurisdiction of its courts.¹ Since the Michigan courts have construed the long-arm statute to extend to the outer limits of due process, Sifers v. Horen, 38 Mich. 195 (1971), a Michigan personal jurisdiction analysis becomes an analysis of federal constitutional limitations.

Because it is not clear to the Court the extent of defendants' contacts with Michigan, the parties shall submit supplements to their briefs, not to exceed 10 pages. Plaintiff's brief shall be filed by May 9, 1990. Defendants' response shall be filed by May 16, 1990.

IT IS SO ORDERED.

1. A "long arm" statute may be used in a federal question action. Southern Machine Co. v. Mohasco Industries, Inc., 401 F.2d 374, 376, n. 2 (1968); United States v. First National City Bank, 379 U.S. 378 (1965); Rule 4(e) and (F), Fed. R. Civ. P.