Westfarm Assocs. v. Int'l Fabricare Inst.

No. HM-92-9 (D. Md. May 6, 1992)

The court holds that a landowner may sue an adjacent landowner in a citizen suit under § 310 of the Comprehensive Environmental Response, Compensation, and Liability ACT (CERCLA) and § 7002 of the Resource Conservation and Recovery Act (RCRA), and that the landowner may sue in tort for punitive damages. The court first holds that, although CERCLA § 310 does not provide for recovery of response costs, the court could impose a civil penalty upon the defendant. The landowner could receive at least some of the relief it seeks under the CERCLA citizen suit provision. The court next holds that the plaintiff complied with the notice requirements for citizen suits under CERCLA § 310(d), even though the U.S. Environmental Protection Agency has not yet issued final regulations prescribing the manner in which a plaintiff in a citizen suit must give notice. The notice that the landowner gave satisfied the procedural requirements and the policy goals of CERCLA § 310(d). The court holds that since RCRA's citizen suit provision does not provide for recovery of response costs, the plaintiff's response cost recovery, if any, must be under another of the counts listed in the complaint. The court does have jurisdiction under RCRA § 7002 to provide broad injunctive relief, including enjoining the adjacent landowner to comply with RCRA requirements. The court notes that, although the landowner seeks a private remedy, the suit for injunctive relief may proceed under RCRA, since the plaintiff is separately pursuing claims for money damages. Finally, the court holds that the plaintiff may pursue its claim for punitive damages in tort, because the plaintiff has sufficiently alerted the defendant of its claims and the grounds on which they are based.

Counsel for Plaintiff
Jeffrey M. Johnson, Joshua S. Kans
Dickstein, Shapiro & Morin
2101 L St. NW, Washington DC 20037
(202) 785-9700

Counsel for Defendant
Timothy A. Vanderver Jr., Duane A. Siler
Patton, Boggs & Blow
2550 M St. NW, Washington DC 20037
(202) 457-6000

[22 ELR 21350]

Murray, J.:

Memorandum

The plaintiff, Westfarm Associates Limited Partnership ("Westfarm"), filed this action for relief based on the allegedly illegal dumping of environmentally hazardous materials, namely tetrachloroethene (also known as perchloroethene or "PCE"), a solvent used by the defendant, International Fabricare Institute ("IFI"), in its dry cleaning operations. Presently pending before this Court is the defendant's motion to dismiss.

I. Factual Summary

Before reaching to the merits of the defendant's motion, this Court must note the legal standards that apply at this stage of the proceeding. Because the Federal Rules of Civil Procedure require only "a 'short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests," Conley v. Gibson, 355 U.S. 41, 47 (1957) (footnote omitted), this Court will grant a motion to dismiss "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spaulding, 467 U.S. 69, 73 (1984). This Court must accept the material allegations of the complaint as admitted, Jenkins v. McKeithen, 395 U.S. 411, 421 (1969), and further must construe those allegations favorably to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).

Westfarm owns land in Montgomery County, Maryland. IFI owns land immediately adjacent to Westfarm's land, on the northwest border. On February 1, 1991, State Farm Automobile Insurance Company ("State Farm") purchased an option to buy a 4.536 acre parcel of Westfarm's land ("Parcel A") for $ 1,778,293.00. In anticipation of that transaction, State Farm arranged for an environmental survey of Parcel A. That survey revealed elevated levels of PCE in the soil and groundwater of Parcel A. Based on those findings, State Farm declined to exercise its option.

Westfarm alleges that IFI has released and continues to release PCE into the environment on IFI's land, in violation of various federal reporting and permitting requirements, and that such release of PCE has damaged and continues to damage the land owned by Westfarm. Westfarm asserts federal and state law claims for its response costs, for compensatory and punitive damages, and for declaratory and injunctive relief.

H. Motion to Dismiss

In its present motion, IFI attacks the sufficiency of Counts II and III in their entirety and Counts V, VI, and VII only to the extent that they include a claim for punitive damages. This Court will address each of these points in turn.

A. Count II

In Count II, Westfarm seeks relief as authorized by the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601 et seq. Asserting that IFI has violated and will continue to violate the notice requirements of § 103 of CERCLA, 42 U.S.C. § 9603, and 40 C.F.R. Part 302, Westfarm brings its claim pursuant to the citizens suit provisions of § 310 of CERCLA, 42 U.S.C. § 9659.¹ Under Count II, Westfarm seeks recovery of its response costs, declaratory and injunctive relief, and attorneys' fees. Complaint at 14 - 15.

IFI raises several arguments in opposition to Count II. First, IFI disputes the allegation that it is in violation of any reporting requirements promulgated under CERCLA. However, as noted above, this Court must take the allegations of the complaint as admitted by the defendant. Jenkins, 395 U.S. at 421. Westfarm alleges that IFI continues to violate CERCLA's reporting requirements, Complaint at P 24, and therefore, this Court must reject IFI's first argument.

Second, IFI argues that § 310(c) does not provide this Court with jurisdiction to award to Westfarm the relief it seeks under Count II. Specifically, IFI maintains that response costs and certain injunctive relief are unavailable in citizens suits. Indeed, Westfarm appears to concede that § 310(c) does not provide for the recovery of response costs or for an injunction requiring IFI to clean up its land. Thus, to the extent that Westfarm wishes to pursue such remedies, it must do so under another of the counts listed in its complaint.

However, IFI concedes that this Court could order IFI to comply with the reporting requirements that Westfarm alleges have been and are being violated. IFI Memorandum at 5. Furthermore, in the context of the citizens suit provisions of § 505 the Clean Water Act, 33 U.S.C. §§ 1365, the Fourth Circuit has noted that "the judicial relief of civil penalties, even if payable to the United States Department of the Treasury, is causally connected to a citizen-plaintiff's injury." Sierra Club v. Simkins Indus., Inc., 847 F.2d 1109, 1113 [18 ELR 21053] (4th Cir. 1988). The reasoning of the Fourth Circuit in that case applies with equal force in the case at bar; this Court has jurisdiction "to impose any civil penalty provided for the violation." Therefore, because Westfarm could receive at least some of the relief it seeks [22 ELR 21351] under Count II, this Court will not dismiss that count from the complaint.

Finally, IFI argues that Westfarm has failed to comply with the notice requirements for citizens suits under § 310(d). On August 9, 1991, Westfarm mailed a notice of intent to sue to the Administrator and Regional Administrator of the Environmental Protection Agency, to the Director of the Hazardous and Solid Waste Management Administration and the Director of the Water Management Administration (both of the Maryland Department of the Environment), and to the defendant. Complaint Ex. A. Such notice would appear to satisfy the requirements of § 310(d).

However, as IFI points out, § 310(d) requires the plaintiff to comply with such notice requirements "as the President shall prescribe by regulation." To date, the EPA has issued only a notice of proposed rulemaking pursuant to § 310(d). 54 Fed. Reg. 3918 (January 26, 1989). In the absence of any final regulations prescribing the manner in which Westfarm must give notice, IFI argues that this Court lacks subject matter jurisdiction over the claims raised in Count II. See Roe v. Wert, 706 F. Supp. 788, 794 [19 ELR 20825] (W.D. Okla. 1989) (compliance with § 310(d) is jurisdictional prerequisite to citizens suit); see also Hallstrom v. Tillamook County, 493 U.S. 20 [20 ELR 20193] (1989) (failure to comply with 60-day notice requirement in citizens suit provision required dismissal).

Taking this argument to its logical conclusion, no court has ever had jurisdiction over a citizens suit filed under § 310 since Congress enacted that section in 1986. Indeed, IFI seems to argue that administrative delay in promulgating rules under § 310(d) could prevent such suits indefinitely. Such a narrow interpretation of § 310(d) could prevent such suits indefinitely. Such a narrow interpretation of § 310(d) would conflict with the legislative intent behind the section — namely that "'citizen[s] are not to be treated as nuisances or troublemakers but rather as welcome participants in the vindication of environmental interests.'" Proffitt v. Commissioners, Township of Bristol, 754 F.2d 504, 506 (3d Cir. 1985) (quoting Friends of the Earth v. Carey, 535 F.2d 165, 172 [6 ELR 20488] (2d Cir. 1976)).

In Hallstrom, the United States Supreme Court held that a court must dismiss the complaint where the plaintiff fails to comply with the 60-day notice requirements in the citizens suit provisions of § 7002(b) of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6972. 493 U.S. at 33. In that case, the plaintiffs failed entirely to notify either federal or state environmental authorities until after the defendant moved for summary judgment. The Court noted that the plaintiffs' failure to provide adequate notice frustrated the provision's dual goals of permitting administrative agencies to respond to the problem and of allowing violators voluntarily to bring themselves into compliance. Hallstrom, 493 U.S. at 29.

In this case, IFI does not dispute the fact that Westfarm has notified all of the necessary administrative agencies and personnel or that such notification satisfied all of the policies of the notice provisions of § 310. Instead, IFI's sole objection centers on Westfarm's failure to comply with final regulations because such regulations do not exist. In the absence of such final regulations, this Court holds that Westfarm provided notice in sufficient quantity and detail to satisfy both the procedural requirements and the policy goals of § 310(d).²

B. Count III

Westfarm also seeks relief as authorized by the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq. Alleging that IFI has disposed and will continue to dispose of hazardous materials in violation of the requirements of §§ 3004 and 3005 of RCRA, 42 U.S.C. §§ 6924, 6925, Westfarm asserts a claim pursuant to the citizens suit provisions of § 7002 of RCRA, 42 U.S.C. § 6972.³ Under Count III, Westfarm seeks recovery of its response costs, declaratory and injunctive relief, and attorneys' fees. Complaint at 14 - 15.

IFI raises several arguments in opposition to Count III. First, IFI argues that § 7002(a) does not provide this Court with jurisdiction to award to Westfarm either its response costs or an injunction requiring IFI to clean up the contaminated land. As it did in connection with Count II, Westfarm appears to concede that § 7002(a) does not provide for the recovery of response costs. Thus, as with Count II, to the extent that Westfarm wishes to recover those costs, it must do so under another of the counts listed in its complaint.

However, this Court has jurisdiction under § 7002 to provide Westfarm with broad injunctive relief. In addition to enjoining IFI to comply with any requirements under RCRA, this Court has jurisdiction under the statute "to order [IFI] to take such other action as may be necessary." This Court therefore may enforce the provisions of RCRA "to the full extent of its legal and equitable powers," Environmental Defense Fund, Inc., v. Lamphier, 714 F.2d 331, 337 (4th Cir. 1983), which conceivably could include an order for IFI to clean up its land.⁴

Second, because Westfarm is not proceeding in this case as a private attorney general, IFI argues that Westfarm cannot pursue a citizens suit under RCRA. Lamphier, 714 F.2d at 337. Allowing the Environmental Defense Fund to pursue injunctive relief, the Fourth Circuit wrote:

Provided plaintiffs are genuinely acting as private attorneys general rather than pursuing a private remedy, nothing in RCRA, as in the [Federal Water Pollution Control Act, 33 U.S.C § 1301 et seq.], bars injunctive relief.

Id. In Middlesex County Sewerage Auth. v. National Sea Clammers Assn., 453 U.S. 1 [11 ELR 20684] (1981), the United States Supreme Court held that FWPCA did not provide a private cause of action for damages and injunctive relief. The court in Lamphier distinguished RCRA from FWPCA and held that a private individual could pursue a claim for injunctive relief under RCRA.

IFI argues that Westfarm cannot pursue injunctive relief under RCRA because it also seeks a private remedy. However, this Court does not read the decision in Lamphier as forbidding suits for injunctive relief under RCRA where, as in the case at bar, the plaintiff also pursues separate claims for money damages. Therefore, Westfarm may pursue injunctive relief under RCRA in Count III and may pursue other remedies in other counts.

Finally, IFI argues that Westfarm may not proceed with its claims under RCRA because "[the Maryland] Department of the Environment has indicated that it will initiate an 'appropriate course of action' against parties who are legally responsible for the alleged contamination." IFI Motion at 9 - 10. Section 7002 prohibits citizens suits where "the Administrator or State has commenced and is diligently prosecuting" a similar action. Dague v. City of Burlington, 935 F.2d 1343, 1353 [21 ELR 21133] (2d Cir. 1991). In this case, however, there is no indication in the pleadings that the Maryland Department of the Environment has begun any actions or prosecutions in connection with Westfarm's complaint. Thus, this Court must reject IFI's final argument.

C. Punitive Damages

In its complaint, Westfarm announces that it seeks punitive damages in the amount of $ 1,000,000.00 in connection with its trespass, nuisance, and strict liability claims under state law in Counts [22 ELR 21352] V, VI, and VII, respectively. Complaint at 15. IFI argues that Westfarm has failed properly to plead the elements of punitive damages.

Very recently, the Maryland Court of Appeals established a clear standard for punitive damages in non-intentional tort cases. Owens-Illinois, Inc. v. Zenobia, 325 Md. 420 (1992).⁵ In such cases, a plaintiff must show so-called "actual malice," which the Court of Appeals defined as "conduct of the defendant characterized by evil motive, intent to injure, ill will, or fraud." Id. at 460. In intentional torts cases, the Court of Appeals apparently retained the less demanding standard of "implied malice." Id. at 460 n.21 (citing Schaefer v. Miller, 322 Md. 297, 319-20 (1991) (collecting cases)).

At this stage of the proceedings, under either punitive damages standard, Westfarm need only allege facts sufficient to give fair notice to IFI of its claims and the grounds upon which they rest. Conley, 355 U.S. at 47. Although the complaint in this case would win no awards for specificity, this Court finds that Westfarm satisfactorily has alerted the defendant regarding the claim for punitive damages, and therefore, this Court will reject IFI's arguments regarding that claim.

III. Conclusion

In sum, this Court will grant IFI's motion to dismiss to the extent that it seeks to purge Counts II and III of any claims for response costs or improper injunctive relief. However, this Court leaves intact the claims for proper injunctive relief in Counts II and III, and also leaves intact the plaintiff's claim for punitive damages under Counts V, VI, and VII.

The Court will enter a separate Order consistent with this Memorandum.

Order

In accordance with the foregoing Memorandum, it is this 6th day of May, 1992, by the United States District Court for the District of Maryland,

ORDERED:

(1) that the motion of the defendant, International Fabricare Institute, to dismiss be, and the same hereby is, Granted in part and Denied in part;

(2) that Count II be, and the same hereby is, Dismissed only as to any claims for response costs and injunctive relief relating to ordering IFI to clean up its land;

(3) that Count III be, and the same hereby is, Dismissed only as to any claim for response costs; and

(4) that the Clerk of the Court shall mail a copy of this Order to all of the parties.

1. Section 301 provides, in part:

(a) Authority to bring civil actions

Except as provided in subsections (d) and (e) of this section . . . any person may commence a civil action on his own behalf —

(1) against any person . . . who is alleged to be in violation of any standard, regulation, condition, requirement, or order which has become effective pursuant to this chapter . . .

The district court shall have jurisdiction in actions brought under subsection (a)(1) of this section to enforce the standard, regulation, condition, requirement, or order concerned . . ., to order such action as may be necessary to correct the violation, and to impose any civil penalty provided for the violation.

(d) Rules applicable to subsection (a)(1) actions

(1) Notice No action may be commenced under subsection (a)(1) of this section before 60 days after the plaintiff has given notice of the violation to each of the following:

(A) The President.

(B) The State in which the alleged violation occurs.

Notice under this paragraph shall be given in such manner as the President shall prescribe by regulation.

§ 310 of CERCLA, 42 U.S.C. § 9659.

2. An alternative holding, based on the EPA's failure to act, illogically would dismiss the complaint in part because the EPA had no chance to provide a swift administrative remedy.

3. Section 7002 provides in part:

(a) In general

Except as provided in subsection (b) or (c) of this section, any person may commence a civil action on his own behalf —

(1)(A) against any person . . . who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this chapter. . . .

The district court shall have jurisdiction, without regard to the amount in controversy or the citizenship of the parties, to enforce the permit, standard, regulation, condition, requirement, prohibition, or order, referred to in paragraph (1)(A), . . . to order such person to take such other action as may be necessary, or both, . . . and to apply any appropriate civil penalties under section 6928(a) and (g) of this title.

(b) Actions prohibited

(1) No action may be commenced under paragraph (a)(1)(A) of this section —

. . .

(B) if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States or a State to require compliance with such permit, standard, regulation, condition, requirement, prohibition, or order.

§ 7002 Of RCRA, 42 U.S.C. § 6972.

4. In its opposition to IFI's motion, Westfarm asserts that it does not seek an injunction ordering IFI to clean up Westfarm's land. Opposition at 14 n.10.

5. Although IFI argues that Westfarm may not recover punitive damages in Maryland in connection with the strict liability claim contained in Count VII, and cites Doe v. Miles Laboratories, 675 F. Supp. 1466, 1481 (D. Md. 1987) in support of that argument, the discussion of punitive damages in Zenobia clearly endorses those damages to strict liability torts in Maryland. See Zenobia, 325 Md. at 463 ("the majority of courts which have considered the issue have found no logical inconsistency in allowing a punitive damages award in a strict liability action").