Ameripride Svc Inc v. Valley Industrial, et al
Filing
915
ORDER signed by Judge Lawrence K. Karlton on 04/20/12 ORDERING that defendant shall pay to the plaintiff $7,754,455.76, plus $2,219,966.19, for a total payment of $9,974,421.95. Defendant SHALL be responsible for one half of all future cleanup costs. Clerk to enter judgment accordingly. CASE CLOSED (Benson, A.)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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AMERIPRIDE SERVICES, INC.,
A Delaware corporation,
NO. CIV. S-00-113 LKK/JFM
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Plaintiff,
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v.
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VALLEY INDUSTRIAL SERVICE, INC.,
a former California corporation,
et al.,
O R D E R
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Defendants.
/
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AND CONSOLIDATED ACTION AND
CROSS- AND COUNTER-CLAIMS.
/
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Pending before the court is resolution of the trial of this
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case.
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of trial, both the facts and the law are difficult.
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As the court has stated at various times during the course
Nonetheless, to begin with the obvious, the court adopts the
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undisputed facts contained in the pretrial order.
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Pretrial Conf. Order, ECF No. 854. Unfortunately, those are about
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the only obvious matters which can be resolved after
1
See Final
trial.
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The court is faced with a trial which the parties have
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tendered as one requiring resolution of contested expert opinion
4
testimony.
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appear to be reasonable people, who have come to contradictory
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results. The court wishes to be clear as to its opinion that this
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is not a case involving hired guns who will say anything someone
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pays them to say.
The experts who have testified are well qualified and
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The testimony of the experts are not opinions in fields of
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exact science, but rather applied science. That fact helps account
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for at least some of the divergent opinions that have been received
12
by the court.
13
lies not only in the nature of the field but also in human nature.
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Central to some of the experts’ testimony is the application
15
of various formulas, which in turn are dependent upon assumptions
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which
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employed.
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by the expert, may, however innocently, be influenced by the trial
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needs of the expert’s sponsor.1
provide
The reason for those divergent opinions, however,
the
integers
to
be
resolved
by
the
equations
In that regard, the “reasonable” assumptions employed
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Moreover, and perhaps more to the point, the applied science
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being contested was developed for purposes quite distinct from the
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questions asked in trial.
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at issue seeks to determine where cleanups are necessary and how
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to proceed with the cleanup.
In the real world, the applied science
In that regard, a defense expert, in
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All of the assumptions employed were supported by other
expert writing, EPA guidance documents or the like.
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1
essence, agreed with the court when asked whether the use of
2
inexact, but experience-based, assumptions was sufficient for the
3
purpose of cleanup.
4
sufficient to carry the burden of proof at trial, since quite
5
different questions are being asked.
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that burden is no more than the preponderance of the evidence.
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ultimate factual determinations.
The court concludes as follows:
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1)
PCE is listed as a hazardous substance under the act.
42
U.S.C. § 9601(14), 40 C.F.R. § 302.4.
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That is true even though
Nonetheless, the court is able to make a sufficient number of
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Such applications, however, may not be
2) The plaintiff’s claims relative to the spill of DNAPL PCE
are supported by the evidence.2
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3) The defendant’s assertion that, by virtue of leaks in the
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waste water system used by plaintiff, the plaintiff spilled waste
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water into the vadose zone, is supported by the evidence.
4) During defendants’ operation on the property the waste
17
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water system also leaked.
19
cleaning and the laundering of contaminated shop towels and other
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such
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contributed to PCE being deposited in the soil.
items
which
Moreover, defendant engaged in both dry
contained
PCE.
Both
of
these
activities
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5) At various times after plaintiff acquired the property,
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plaintiff added washing machines which increased the volume of
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waste water being leaked.
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2
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DNAPL PCE is dense nonaqueous phase liquid PCE. The parties
agree it is pure PCE.
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6) Although plaintiff did not engage in dry cleaning, for
2
some period of time it also laundered PCE-laden shop towels and
3
like items.
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refused to launder items which were thought to contain PCE, and,
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accordingly, thereafter the amount of PCE in the waste water was
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reduced.
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After the danger of PCE became apparent, plaintiff
7) The waste water flow of both plaintiff and defendant
touching the DNAPL carried the PCE to the ground water.
8)
Vapor
emanating
from
the
deposited
DNAPL
PCE
also
contributed to the PCE in the ground water.
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9) The contaminated ground water eventually reached property
12
down stream, which caused the relevant governmental agencies to
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order plaintiff to undertake the cleanup of the site.
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10) The evidence does not permit a rational allocation of
fault between plaintiff and defendant.3
The suit tests liability under CERLA.
I now briefly sketch
17
the court’s understanding of the pertinent provisions of that
18
statute.4
19
serious
20
pollution.”
21
United States, 556 U.S. 599, –-, 129 S.Ct. 1870, 1874 (2009). “The
22
Act was designed to promote the timely cleanup of hazardous waste
Congress enacted CERCLA in 1980 “in response to the
environmental
and
health
risks
posed
by
industrial
Burlington Northern & Santa Fe Railway Company v.
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3
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This conclusion will be somewhat elaborated later in this
opinion.
4
The court here draws on its previous explanation of the
statute during resolution of a motion for summary judgement entered
May 12,2011. See Order, ECF No. 735.
4
1
sites and to ensure that the costs of such cleanup efforts were
2
borne by those responsible for the contamination.”
3
citations omitted).
Id. (internal
4
Under CERCLA section 107(a), 42 U.S.C. § 9607(a), the federal
5
government, state governments, and private parties may all initiate
6
cleanup of toxic areas, and each such entity may sue potentially
7
responsible parties for reimbursement of response costs.
8
Carson Harbor v. County of Los Angeles, 433 F.3d 1260, 1265 (9th
9
Cir. 2006) (Carson Harbor II) (quoting Ascon Properties, Inc. v.
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Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir. 1989)).
11
Circuit
12
See
plaintiff’s prima facie case under section 107(a):
13
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has
identified
four
elements
necessary
to
The Ninth
a
private
(1) the site on which the hazardous substances
are contained is a “facility” under CERCLA’s
definition of that term, Section 101(9), 42
U.S.C. § 9601(9);
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(2) a “release” or “threatened release” of any
“hazardous substance” from the facility has
occurred, 42 U.S.C. § 9607(a)(4);
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(3) such “release” or “threatened release” has
caused the plaintiff to incur response costs
that were “necessary” and “consistent with the
national contingency plan,” 42 U.S.C. §§
9607(a)(4) and (a)(4)(B); and
20
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(4) the defendant is within one of four
classes of persons subject to the liability
provisions of Section 107(a).
22
23
City of Colton v. American Promotional Events, Inc.-West, 614 F.3d
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998, 1002-03 (9th Cir. 2010) (quoting Carson Harbor Village, Ltd.
25
v. Unocal Corp., 270 F.3d 863, 870-71 (9th Cir. 2001) (en banc)
26
(Carson Harbor I)).
A “release” for purposes of this section
5
1
includes
“any
2
emptying, discharging, injecting, escaping, leaching, dumping, or
3
disposing into the environment.”
4
classes
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“potentially responsible parties,” include, as is relevant to this
6
case, “(1) the owner and operator of . . . a facility,” and “(2)
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any person who at the time of disposal of any hazardous substance
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owned or operated any facility at which such hazardous substances
9
were disposed of.”
of
spilling,
persons
leaking,
subject
pumping,
pouring,
42 U.S.C. § 9601(22).
to
liability,”
also
42 U.S.C. § 9607(a)(1)-(2).
emitting,
The “four
known
as
Under CERCLA
10
section 113(g)(2), a party who prevails on a section 107 claim may
11
also
12
reimbursement for future response costs as well.
13
Colton, 614 F.3d at 1008.
seek
a
declaratory
judgment
that
it
is
entitled
to
See City of
14
Absent from the four elements of a prima facie case is any
15
requirement that the plaintiff be innocent with regard to the
16
contamination at issue. United States v. Atlantic Research Corp.,
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551 U.S. 128, 139 (2007).
18
party remediates the damage and incurs response costs, that party
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may seek to recover those costs from another.
Thus, where one potentially responsible
Id.
20
With regard to allocating responsibility among potentially
21
responsible parties, CERCLA provides overlapping and somewhat
22
convoluted mechanisms.
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potentially responsible parties.
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at 1879, 1881.
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several. Adobe Lumber, Inc. v. Hellman, 658 F. Supp. 2d 1188, 1192
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(E.D. Cal. 2009).
Section 107 imposes strict liability on
Burlington Northern, 129 S.Ct.
Liability under section 107 is generally joint and
A defendant seeking to avoid liability for the
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1
entire response cost has two options under CERCLA.
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107, a defendant may avoid joint and several liability by proving
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that “a reasonable basis for apportionment exists.”
4
Northern, 129 S.Ct. at 1881 (citing United States v. Chem-Dyne
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Corp., 572 F. Supp. 802, 810 (S.D. Ohio 1983)).
6
this basis looks solely to whether the defendant can “establish[]
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a fixed amount of damage for which [it] is liable,” and not to any
8
equitable
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Alternatively, CERCLA section 113(f)(1) authorizes claims for
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contribution “from any other person who is liable or potentially
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liable under section 9607(a) of this title, during or following any
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civil action under section 9606 of this title or under section
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9607(a) of this title.”
14
does allow for consideration of equitable factors.
15
resolving contribution claims, the court may allocate response
16
costs among liable parties using such equitable factors as the
17
court determines are appropriate.”), Burlington Northern, 129 S.Ct.
18
at 1882 n.9.
19
It
concerns.
is
clear
Id.
that
at
1882
n.9
has
Burlington
Apportionment on
(quotation
42 U.S.C. § 9613(f)(1).
plaintiff
Under section
omitted).
Section 113(f)
established
Id. (“In
defendant’s
20
liability under § 107.
21
the meaning of the statute, there were releases from that facility,
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the releases caused plaintiff to incur response costs consistent
23
with
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responsible for the release of DNAPL PCE and for its discharge of
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waste water, which, together with the plaintiff’s waste water,
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mobilized the DNAPL and resulted in contamination of the ground
the
national
Simply put, the site is a facility within
contingency
7
plan,
and
the
defendant
is
1
water. Moreover, as noted above, vapor transport also affected the
2
ground water.
3
cannot “establish[] a fixed amount of damage for which [it is]
4
liable,” Burlington Northern, 129 S.Ct at 1882 n.9, defendant is
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relegated to seeking equitable apportionment under
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Before addressing the issue of equitable apportionment, the court
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must first address the question of damages.
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into a written stipulation as follows:
Given that the court concluded above that defendant
§ 113(f)(1).
The parties entered
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1. AmerPride has directly incurred $7,570,921 in
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investigation and remediation costs though August
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2010.
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2. AmeriPride has directly incurred $474,730 in
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regulatory oversight costs through September 2010.
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3. AmerPride paid $8,250,000 to Huhtamaki to
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settle all claims Huhtamaki had against AmeriPride.
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4. AmeriPride paid $2,000,000 to Cal-Am Water
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Co. to settle all claims Cal-Water Co. had against
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Ameripride.
19
Stipulation, ECF No. 861.
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It is also undisputed that Ameripride received $ 500,000 in
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settlement
22
See
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(Undisputed Fact).
24
issue in the instant case.
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defendants are entitled to a credit for those sums.
26
Final
from
Chromalloy
Pretrial
Conf.
and
Order,
$2,750,000
ECF
No.
from
854,
Petrolane.
at
13,
¶
93
Both settlements related to the pollution at
This court has previously held that
There is no question that items 1 and 2 are sums subject to
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1
equitable apportionment.
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should be considered responsible for any of the sums paid in
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settlement of the claims of Huhtamaki and Cal-Water.
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that it can only be responsible for “response costs,” and since it
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cannot be said that those sums are exclusively response sums,
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plaintiff’s claim must fail.
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summary
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settlement payments under § 107.
9
Nonetheless the court held there, and continues to believe, that
judgment
order,
Defendant, however, contests whether it
It asserts
For reasons explained in the court’s
plaintiff
cannot
recover
for
those
See Order, ECF No. 735, at 40.
See id.
10
it could and should consider those payments under §113.
11
Defendant argues, nevertheless, that those payments should not be
12
considered because the settlements resolved all claims, including
13
various state law claims, not only those which would be considered
14
response costs if incurred in supplying settling plaintiffs with
15
alternate sources of water. The court simply cannot agree.
16
Whether the settled claims were under the federal statute or
17
pled as state claims, the gravamen of all those claims was the
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contamination of the ground water, the very claims at issue in the
19
suit under CERCLA.
20
any authority addressing the question of how the court should
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account for AmeriPride’s settlement with Cal-Am Water Co. and
22
Huhtamaki, when that settlement involved multiple claims,
23
surprisingly, has the court’s own research found any established
24
guidance thereon.
The parties have not supplied the court with
nor,
25
While CERCLA § 9613 has provisions addressing contributions
26
after settlement with a governmental party, there is no proviso
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1
directly dealing with settlements with nongovernmental parties.
2
See 42 U.S.C. § 9613(f)(3)(B) (“A person who has resolved its
3
liability to the United States or a State for some or all of a
4
response action ... in an administrative or judicially approved
5
settlement may seek contribution from any person who is not party
6
to a settlement ....”); see also City of Detroit v. Simon, 247 F.3d
7
619, 628 (6th Cir. 2001) (there is no contribution protection for
8
a party that entered into a settlement with Detroit because the
9
city cannot be equated with the United States or a state, as the
10
language of CERCLA requires); Akzo Coatings, Inc. v. Aigner Corp.,
11
30 F.3d 761, 771 (7th Cir. 1994) (noting that Ҥ 113(f)(2) says .
12
. . [n]othing . . . about resolving liability to private parties”).
13
However, although the text of CERCLA is silent regarding the right
14
of contribution protection for private party settlements, to
15
facilitate settlement, a number of federal courts have interpreted
16
CERCLA's language to include private parties.
17
Citizens Communications Co., 532 F.3d 70, 90 fn.7 (1st Cir. 2008)
18
(citing 2 A.J. Topol & R. Snow, Superfund Law and Procedure, §
19
7:91, at 181 (2007 ed.)); K.C.1986 L.P. v. Reade Mfg., 472 F.3d
20
1009, 1017 (8th Cir.2007) (“Although § 9613(f)(2) governs only the
21
effect of settlements with the government, not private parties,
22
general equitable principles remain in play.”).
23
purpose of § 113 is to do equity, such a purpose is clearly served
24
by recognizing payments made to private claimants in settlement of
25
claims arising out of CERLA-focused claims. Accordingly, the court
26
finds that the total amount subject to equitable apportionment is
10
City of Bangor v.
Because the very
1
$18,295,651.00, less $3,250,000 for a total of $15,045,651.00.
2
After including the consultant and other costs of $446,656.84 paid
3
for investigation and remediation at the AmeriPride site since
4
August 2010, and the $16,604.52 paid for regulatory oversight of
5
the AmeriPride site since January 2011, the total amount subject
6
to equitable apportionment is $15,508,911.52.
7
Section 223(f) gives the trial court broad discretion to
8
consider whatever equitable factors it deems appropriate under the
9
circumstances of the case.
42 U.S.C. § 9613(f)(1) (“In resolving
10
contribution claims, the court may allocate response costs among
11
liable parties using such equitable factors as the court determines
12
are
13
apportionments use what are called the “Gore factors,” named after
14
a rejected attempt by then-Congressman Albert Gore to amend CERCLA
15
that would have listed those factors as a basis for allocating
16
liability.
17
74 (1st Cir. 1999); Centerior Serv. Co. v. Acme Scrap Iron & Metal
18
Corp., 153 F.3d 344, 354 (6th Cir. 1998); United States v. Colorado
19
& Eastern R.R. Co., 50 F.3d 1530, 1536 n.5 (10th Cir. 1995); Kerr-
20
McGee Chem. Corp. v. Lefton Iron & Metal Co., 14 F.3d 321, 326 (7th
21
Cir. 1994); In re Bell Petroleum Servs., Inc., 3 F.3d 889, 899-900
22
(5th Cir. 1993).
23
appropriate.”)5
Some
courts,
in
making
equitable
See, e.g., Acushnet Co. v. Mohasco Corp., 191 F.3d 69,
The “Gore factors” are as follows: (I) The ability of the
24
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25
26
A district court’s equitable apportionment determinations
are subject to an abuse of discretion standard of review on appeal.
In re Dant & Russell, 951 F.2d 246, 249 (9th Cir. 1991).
11
1
parties to demonstrate that their contribution to a discharge,
2
release or disposal of a hazardous waste can be distinguished; (ii)
3
The amount of the hazardous waste involved; (iii) The degree of
4
toxicity of the hazardous waste involved; (iv) The degree of
5
involvement by the parties in the generation, transportation,
6
treatment, storage, or disposal of the hazardous waste; (v) The
7
degree of care exercised by the parties with respect to the
8
hazardous waste concerned, taking into account the characteristics
9
of such waste; and (vi) The degree of cooperation by the parties
10
with Federal, State, or local officials to prevent any harm to the
11
public health or the environment.
12
United States v. A & F Materials, Co., 578 F.Supp. 1249 (S.D. Ill.
13
1984).6
14
Bell Petroleum, 3 F.3d 899-900;
Another district court when applying the Gore Factors added
15
“critical factors” for courts to take into account in making CERCLA
16
contribution allocations, to wit: the financial resources of the
17
liable parties; the extent of the benefit that the parties received
18
from the hazardous waste disposal practices; the extent of the
19
parties’ knowledge and awareness of the environmental contamination
20
of the site; and the efforts made, if any, to prevent environmental
21
harm and the efforts made to settle the case.
22
Davis, 31 F.Supp.2d 45, 63 (D.R.I. 1998), aff’d, 261 F.3d 1 (1st
23
Cir. 2001).
United States v.
24
25
26
6
This court must confess some unwillingness to apply factors
rejected by Congress.
12
1
Yet
another
district
court
has
further
considered:
(1)
2
economic benefits received by a party as a result of its cleanup
3
actions; (2) a party’s efforts to conduct source control at its
4
facility; (3) windfalls from settlements a party made with other
5
PRPs; and (4) a party’s decision to release some PRPs from
6
liability.
7
Liquidating Trust, 306 F.Supp.2d 1040, 1101 (D.Kan. 2003).
City of Wichita, Kansas v. Trustees of APCO Oil
orp.
8
None of these lists is intended to be exhaustive or exclusive,
9
and “in any given case, a court may consider several factors, a few
10
factors, or only one determining factor . . . depending on the
11
totality of the circumstances presented to the court.”
12
States v. Consolidated Coal Co., 345 F.3d 409, 413-14 (6th Cir.
13
2003) (quoting Environmental Trans. Sys., Inc. v. ENSCO, Inc., 969
14
F.2d 503, 509 (7th Cir. 1992).
United
It is this court’s view that, in many ways, the factors noted
15
16
above will not fairly measure apportionment.
First, it is hardly
17
insignificant that, until the decision of the Delaware
18
Court, the defendants were defunct corporations who had no capacity
19
to respond to cleanup orders.
20
way of clearly allocating responsibility for the contamination of
21
either the vadose zone or the ground water.
22
evidence is that, but for the DNAPL PCE deposits of the defendant,
23
the ground water would not have been affected; however, it appears
24
equally true that, but for the leaks in waste water system, the
25
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26
////
Supreme
Second, as noted above, there is no
13
The best view of the
1
ground water might well not have been effected.7
2
it is certainly true that plaintiffs spilled more waste water
3
because it increased the number of machines and processed laundry
4
over a longer period, it is also true that during defendant’s
5
period of possession of the facility, the waste water it spilled
6
contained more PCE and that it also engaged in dry cleaning using
7
PCE as a solvent.8
8
appreciated during defendant’s operation of the facility, or in the
9
earlier years of plaintiff’s operation.
Moreover, while
Moreover, PCE’s environmental danger was not
Given the facts as the court has found them, it concludes
10
11
that the fairest apportionment is to divide responsibility equally.
12
This would result in each party being responsible for $7,754,456.18
13
in costs expended so far. This number, however, fails to recognize
14
that plaintiff has borne all of these costs for the many years
15
since the first cleanup order.
16
court orders defendant to also pay interest in an amount calculated
17
in accordance with the interest rate calculation provided in 26
18
U.S.C. § 9507(d)(3)(C),9 and accruing on the date when the costs
To roughly address this fact, the
19
7
20
21
22
23
24
25
26
It appears to be uncertain whether a cleanup order would
have been issued if there had been no contamination of the ground
water and the property continued to be used for commercial
purposes.
8
The extent of defendant’s spill is not known because records
were apparently not kept of its use of water, the extent of waste
water, or contents of waste water.
9
“Interest on advances made to the Superfund shall be at a
rate determined by the Secretary of the Treasury (as of the close
of the calendar month preceding the month in which the advance is
made) to be equal to the current average market yield on
outstanding marketable obligations of the United States with
14
1
were paid by AmeriPride.
2
parties on April 18, 2012, that interest amount, payable by
3
Defendant, is $2,219,966.19.
4
According to a stipulation filed by the
See Stip., ECF No. 913, at 8.10
Finally, plaintiff seeks declaratory judgment as to future
5
cleanup costs.
6
shall be responsible for one half of all future costs.11
For the reasons explained above, the defendant
7
Accordingly the court order as follows:
8
1) Defendant shall pay to the plaintiff $7,754,455.76, plus
9
10
11
12
13
$2,219,966.19, for a total payment of $9,974,421.95.
2) Defendant SHALL be responsible for one half of all future
cleanup costs.
3) The Clerk of the Court is directed to enter judgment
accordingly.
14
IT IS SO ORDERED.
15
DATED: April 20, 2012.
16
17
18
19
20
21
22
23
24
25
26
remaining periods to maturity comparable to the anticipated period
during which the advance will be outstanding and shall be
compounded annually.” 26 U.S.C. § 9507(d)(3)(C).
10
The parties dispute from what date interest should accrue.
From the court’s point of view, this is a matter of equity rather
than statutory requisites.
11
Defendants liability may be limited by the amount of
insurance available. The court has received no evidence concerning
such limitation. And thus makes no finding as to that question.
15
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