USA v. Wilmer et al

Filing 72

ORDER Affirming in Part and Rejecting in Part 66 Report and Recommendations: 40 Motion for Summary Judgment is denied in part and granted in part, and 68 Motion for Dismissal is denied as moot, by Judge Christine M. Arguello on 3/7/13.(dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 11-cv-02244-CMA-MJW
UNITED STATES OF AMERICA,
Plaintiff,
v.
RICHARD WILMER, and
ROCK WEISS,
Defendants.

ORDER AFFIRMING IN PART AND REJECTING IN PART JANUARY 16, 2013
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

This case was referred to United States Magistrate Judge Michael J. Watanabe
pursuant to 28 U.S.C. § 636 and Fed. R. Civ. P. 72. (Doc. # 2.) On January 16, 2013,
the Magistrate Judge issued a Recommendation (Doc. # 66), advising that the
Government’s Motion for Summary Judgment (Doc. # 40) be denied. For the reasons
discussed below, the Court affirms in part and rejects in part the Magistrate Judge’s
Recommendation.
I. BACKGROUND
The Government initiated this action on August 26, 2011, by filing a Complaint
seeking to recover costs it incurred in cleaning up the Cherokee Print Shop Wastes
Superfund Site, located at 4411 Cherokee Street, Denver, Colorado (the “Site”). The
action arises under the Comprehensive Environmental Response, Compensation, and

Liability Act, 42 U.S.C. §§ 9601-9675 (2000) (“CERCLA”). (Doc. # 1.) In the Complaint,
the Government alleges that Defendant Rock Weiss is jointly and severally liable with
former Co-Defendant Richard Wilmer, for all response costs incurred in connection with
the Site.1 (Id.) It alleges that Weiss is liable as an “arranger” under Section 107(a)(3) of
CERCLA. In support of its allegations, the Government relies on the following facts,
which are taken from the stipulations in the Final Pretrial Order. (Doc. # 62.)
From 1998 until 2006, Weiss owned both a semi-trailer and the print shop liquids
it contained. Weiss kept the trailer at a storage facility, and at some point he became
delinquent on his contract with the storage facility. In 2006, the storage facility filed suit
against Weiss in Arapaho County Small Claims Court and obtained a judicial order
requiring him to remove the trailer from the facility. The next week, Weiss sold the
trailer, including its contents, in a “five minute transaction” to Wilmer. Weiss and Wilmer
did not discuss anything relating to the disposal of the trailer contents, nor did Weiss
care what Wilmer did with the contents. Weiss did not attempt to sell the contents of the
trailer separately from the trailer itself; in fact, he charged less for the trailer full of print
shop liquids than he would have for the trailer by itself. At least some of the print shop
liquids contained hazardous substances including lead and carbon tetrachloride.

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The Government alleged that Wilmer was liable under Section 107(a)(1) and (2) of CERCLA
as the owner of the Site where hazardous substances were disposed. After failing to respond to
the Complaint, and upon motion of the Government, on February 24, 2012, the Clerk of the
Court entered a final default judgment against Wilmer pursuant to Fed. R. Civ. P. 55(b). (Doc.
# 32.) The claim against Wilmer will be discussed only as needed to provide background for the
outstanding claim against Weiss.

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After purchasing the trailer and contents from Weiss, Wilmer parked the trailer
at the Site for an extended period of time. In response to City and County of Denver
enforcement of local ordinances, prohibiting parking a semi-trailer at a residential
property, Wilmer unloaded hundreds of containers of print shop liquids from the trailer
and placed them on the Site. He then removed the trailer.
In November 2009, the Site was assessed by United States Environmental
Protection Agency (“EPA”) personnel who observed that many of the containers were
open, leaking, rusting, or dented. On December 11, 2009, an EPA contractor
performed a hazard classification on some of the containers, finding that they held
hazardous substances within the meaning of CERCLA. In December 2009, EPA
personnel contacted both Defendants to determine their willingness and ability to
remove the hazardous substances from the Site. After finding that the Defendants
could not commit to a timely response plan, EPA issued an Action Memorandum and
began to remove all hazardous materials and contaminated soils from the Site. This
work was completed in February 2010. EPA incurred response costs in investigating
and removing the hazardous substances from the Site consistent with CERCLA’s
National Contingency Plan, 40 C.F.R. Part 300.
Additionally, the parties have agreed that: Weiss is a “person” within the meaning
of Section 101(21) of CERCLA; the Site is a “facility” within the meaning of Section
101(9) of CERCLA; and there were “releases” or the threat of “releases” of “hazardous
substances,” including ignitable materials, highly acidic and corrosive liquids, lead, and

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carbon tetrachloride, into the environment at the Site within the meaning of Sections
101(22) and 101(14) of CERCLA.
The Government filed the underlying Motion for Summary Judgment on May
10, 2012. (Doc. # 40.) Weiss responded on May 31, 2012 (Doc. # 41), and the
Government replied on June 13, 2012 (Doc. # 42). Defendant responded to the
Government’s reply on June 27, 2012 (Doc. # 45) and the Government filed a Sur-Reply
on July 2, 2012 (Doc. # 49). The Magistrate Judge issued the Final Pretrial Order on
November 27, 2012, which contains the stipulated facts discussed above. (Doc. # 62.)
On January 16, 2013, the Magistrate Judge issued his Recommendation,
in which he found that there was a genuine dispute of material fact and therefore
recommended that the motion for summary judgment be denied. (Doc. # 66.)
On January 30, 2013, the Government objected to the Magistrate Judge’s
Recommendation. (Doc. # 67.) Defendant has not filed a response.2
II. STANDARDS OF REVIEW
A.

RECOMMENDATION OF THE MAGISTRATE JUDGE
When a magistrate judge issues a recommendation on a dispositive matter,

a district court is required to “determine de novo any part of the magistrate judge’s
[recommendation] that has been properly objected to.” Fed. R. Civ. P. 72(b)(3).
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However, Defendant did file a “Motion for Dismissal” on February 12, 2013 (Doc. # 68),
to which the Government responded on February 27, 2013 (Doc. # 70). Defendant’s motion
raises issues clearly in response to the Magistrate Judge’s Recommendation and the Government’s Objections. (See Doc. # 68.) Although Defendant’s motion appears by all accounts to
be untimely, the arguments it raises have been considered by the Court but add nothing new
to the Court’s analysis. Ultimately, as discussed below, because a genuine dispute of material
fact exists on the issue of “arranger” liability, the Court will deny Defendant’s motion as moot.

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An objection is properly made if it is both timely and specific. United States v. One
Parcel of Real Property Known As 2121 East 30th St., 73 F.3d 1057, 1059 (10th Cir.
1996). An objection is timely if made within 14 days after the magistrate judge issues
his recommendation. Id. An objection is sufficiently specific if it “enables the district
judge to focus attention on those issues – factual and legal – that are at the heart of the
parties’ dispute.” Id. (quoting Thomas v. Arn, 474 U.S. 140, 147 (1985)). In conducting
its review, “[t]he district judge may accept, reject, or modify the [recommendation];
receive further evidence; or return the matter to the magistrate judge with instructions.”
Fed. R. Civ. P. 72(b)(3). In the instant case, the Government’s Objections were both
timely and specific, thereby triggering de novo review of the matter.
B.

SUMMARY JUDGMENT
Summary judgment is warranted under Fed. R. Civ. P. 56(a) when “the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” if it is
essential to proper disposition of the claim under the relevant substantive law. Wright v.
Abbott Labs., Inc., 259 F.3d 1226, 1231–32 (10th Cir. 2001). A dispute is “genuine”
if the evidence is such that it might lead a reasonable jury to return a verdict for the
nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir. 1997). When
reviewing a motion for summary judgment, a court must view the evidence in the light
most favorable to the non-moving party. Id. However, conclusory statements based

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merely on conjecture, speculation, or subjective belief are not competent summary
judgment evidence. Bones v. Honeywell Int'l, Inc., 366 F.3d 869, 875 (10th Cir. 2004).
The moving party bears the initial burden of demonstrating an absence of a
genuine dispute of material fact and entitlement to judgment as a matter of law. Id.
In attempting to meet that standard, a movant who does not bear the ultimate burden of
persuasion at trial does not need to disprove the other party's claim; rather, the movant
need simply point out to the court a lack of evidence for the other party on an essential
element of that party's claim. Adler v Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th
Cir. 1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).
Once the movant has met its initial burden, the burden shifts to the nonmoving
party to “set forth specific facts showing that there is a genuine issue for trial.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). The nonmoving party may
not simply rest upon its pleadings to satisfy its burden. Id. Rather, the nonmoving party
must “set forth specific facts that would be admissible in evidence in the event of trial
from which a rational trier of fact could find for the nonmovant.” Adler, 144 F.3d at 671.
“To accomplish this, the facts must be identified by reference to affidavits, deposition
transcripts, or specific exhibits incorporated therein.” Id.
Finally, the Court notes that summary judgment is not a “disfavored procedural
shortcut”; rather, it is an important procedure “designed ‘to secure the just, speedy and
inexpensive determination of every action.’” Celotex, 477 U.S. at 327 (quoting Fed. R.
Civ. P. 1).

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C.

PRO SE DEFENDANT
Finally, because Defendant is proceeding pro se, the Court has construed

his pleadings more liberally and held them to a less stringent standard than formal
pleadings drafted by lawyers. See Erickson v. Pardus, 551 U.S. 89, 94 (2007).
The Court, however, cannot act as advocate for Defendant, who must still comply
with the fundamental requirements of the Federal Rules of Civil Procedure. See Hall
v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).
III. ANALYSIS
The Court has reviewed this matter de novo, including carefully considering all
relevant pleadings, the Recommendation, and the Government's Objections thereto.
Although the Court agrees with the Magistrate Judge that a genuine dispute of material
fact precludes entry of full summary judgment, the Court comes to this conclusion for
reasons different than those expressed by the Magistrate Judge. Also, the Court
disagrees with the Magistrate Judge’s implicit conclusion that entry of summary
judgment is inappropriate on those elements of liability that are no longer in dispute.
CERCLA is designed to “facilitate the prompt cleanup of hazardous waste sites
and to shift the cost of environmental response from the taxpayers to the parties who
benefitted from the wastes that caused the harm.” Pub. Serv. Co. of Colo. v. Gates
Rubber Co., 175 F.3d 1177, 1181 (10th Cir. 1999) (citation omitted). As such, CERCLA
authorizes a cause of action to recover the costs, including future costs, a party incurs
investigating and remediating a contaminated site. 42 U.S.C. § 9607(a); Bd. of Cnty.

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Comm'rs of Cnty. of La Plata, Colorado v. Brown Group Retail, Inc., 768 F. Supp. 2d
1092, 1111 (D. Colo. 2011).
Generally, to prevail on a CERCLA claim, the United States must prove that
(1) the site is a “facility,” as defined in Section 101(9) of CERCLA; (2) there has been
a release or threatened release of a hazardous substance from the site; (3) the release
or threatened release has caused the United States to incur response costs; and
(4) the defendant is a “covered person” under Section 107(a). United States v.
Hardage, 761 F. Supp. 1501,1508 (W.D. Okla. 1990). Section 107(a) identifies four
categories of “covered persons” who are potentially liable under the statute, including
those who “arrange for” the disposal of hazardous substances. 42 U.S.C. § 9607(a)(3).
In pertinent part, Section 107(a)(3) provides that “any person who by contract,
agreement, or otherwise arranged for disposal . . . of hazardous substances owned
or possessed by such person . . . from which there is a release, or a threatened release
which causes the incurrence of response costs, of a hazardous substance, shall be
liable for . . . all costs of removal or remedial action incurred by the United States
Government . . . not inconsistent with the national contingency plan.” 42 U.S.C.
§ 9607(a).
The stipulated facts of this case have established three of the four elements, i.e.,
that the Site is a “facility” as defined under CERCLA, that there has been a release or
threatened release of hazardous substances from the Site, and that the release or
threatened release has caused the United States to incur response costs. (Doc. # 62,

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¶¶ 22, 25, 26.) As such, summary judgment on these elements is appropriate.
However, a genuine dispute exists as to whether Weiss is a “covered person” under
CERCLA.
The Government asserts that it is entitled to summary judgment because
Weiss admitted to selling a trailer containing print shop liquids, some of which were
hazardous, to Wilmer, who then unloaded onto the Site the containers, the contents of
which were released or threatened to be released into the environment. (Doc. # 62,
¶¶ 4, 7, 26, 27.) The Government contends these facts prove that Weiss is a “covered
person” under Section 107(a)(3) because he “arranged” for the disposal of hazardous
substances and is, therefore, liable for the costs of cleaning up the Site as an
“arranger.” It further contends that the question of whether Weiss is an “arranger” under
CERCLA is clear and does not require the Court to reach any novel issues
in interpreting the scope of arranger liability.
In response, Weiss disputes the Government’s characterization of the sale and
argues that he did not intend for the disposal of hazardous materials under the meaning
of CERCLA and, therefore, cannot be found liable as an arranger. Section 101(29)
of CERCLA defines “disposal” by reference to the Solid Waste Disposal Act as:
the discharge, deposit, injection, dumping, spilling, leaking, or placing of
any solid waste or hazardous waste into or on any land or water so that
such solid waste or hazardous waste or any constituent thereof may enter
the environment or be emitted into the air or discharged into any waters,
including ground waters.

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42 U.S.C. § 6903. To support his argument, Weiss cites two instances in which courts
have analyzed whether a plaintiff must establish that the defendant had specific intent to
dispose of hazardous substances. See Burlington Northern Santa Fe Ry. Co. v. United
States, 556 U.S. 599 (2009); see also Morton Intern., Inc., v. A.E. Staley Mfg. Co., 343
F.3d 699, 679 (3rd Cir. 2003) (discussing the intent element before focusing on the
factors of ownership, knowledge of disposal, and control over the disposal process to
determine arranger liability).
The Supreme Court has noted that specific intent is required for arranger liability
in at least some instances. Burlington Northern, 556 U.S. at 610. In Burlington
Northern, the Court explained that the statute does not define what it means to
“arrang[e] for” disposal of a hazardous substance and therefore gave the phrase its
ordinary meaning, which implies “action directed to a specific purpose.” Id. The Court
noted that liability would clearly attach when “the sole purpose” of the transaction was to
discard “a used and no longer useful hazardous substance.” Id. Conversely, the Court
noted that “[i]t is similarly clear that an entity could not be held liable as an arranger for
merely selling a new and useful product if the purchaser of that product later, and
unbeknownst to the seller, disposed of the product in a way that led to contamination.”
Id. The Court further explained, “[l]ess clear is the liability attaching to the many
permutations of ‘arrangements’ that fall between these two extremes – cases in which
the seller has some knowledge of the buyers’ planned disposal or whose motives for the
‘sale’ of a hazardous substance are less than clear.” Id.

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The facts of the current case fall somewhere in this middle ground. It is unclear
whether, at the time of Weiss’s sale to Wilmer, the print shop liquids were useful
hazardous materials or instead merely hazardous waste. If the print shop liquids were
useful hazardous materials, Burlington Northern would require the Government to prove
that Weiss had the specific intent to dispose of them. 556 U.S. at 610. However, if the
Government proves that the print shop liquids were hazardous wastes, whether it would
be required to further establish that Weiss had the specific intent to dispose of them
remains an open question. Compare United States v. Gen. Elec. Co., 670 F.3d 377,
387 (1st Cir. 2012) (holding that the defendant had the requisite intent to dispose of
hazardous waste and was therefore liable as an “arranger” under CERCLA); and United
States v. Cello-Foil Prods., Inc., 100 F.3d 1227, 1231 (6th Cir. 1996) (acknowledging
the “indispensable role that state of mind must play in determining whether a party has
otherwise arranged for disposal . . . of hazardous substances” (internal citations
omitted)); and Edward Hines Lumber Co. v. Vulcan Materials Co., 685 F. Supp. 651,
654 (N.D. Ill. 1988) aff’d, 861 F.2d 155 (7th Cir. 1988) (liability attaches only to parties
who transact in order to dispose of a hazardous substance); with Morton Int'l, Inc. v.
A.E. Staley Mfg. Co., 343 F.3d 669, 679 n.6 (3rd Cir. 2003) (“specific intent or at least
specific knowledge of the waste disposal . . . is higher than the general knowledge level
we require”); and South Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402, 407 (11th Cir.
1996) (while “a party's knowledge of the disposal . . . and intent are relevant to
determining whether there has been an ‘arrangement’ for disposal, they are not

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necessarily determinative”). At this stage in the proceedings it is not clear what
evidence, if any, exists to show that Weiss intended Wilmer’s eventual disposal of the
liquids, and Weiss’s motive for the “sale” is disputed by the parties. In such situations,
“the determination [of] whether an entity is an arranger requires a fact-intensive inquiry
that looks beyond the parties characterization of the transaction as a ‘disposal’ or a
‘sale’ and seeks to discern whether the arrangement was one Congress intended to fall
within the scope of CERCLA’s strict-liability provisions.”3 Id.
Accordingly, the Court finds that a genuine dispute of material fact remains as to
the nature of the “sale”: principally whether the print shop liquids were useful hazardous
products or waste when sold, and whether Weiss had the requisite intent to dispose of
the materials within the meaning of CERCLA.
IV. CONCLUSION
For the foregoing reasons, it is ORDERED that the Recommendation of United
States Magistrate Judge Michael J. Watanabe (Doc. # 66) is AFFIRMED IN PART and
REJECTED IN PART. Pursuant to the Recommendation, it is
FURTHER ORDERED that the Government’s Motion for Summary Judgment
(Doc. # 40) is DENIED IN PART as to the issue of “arranger” liability and GRANTED IN
PART in all other respects. It is

3

As such, the Court attaches no special significance to the stipulation that Weiss “discounted
the price of the trailer contents to dispose of them with the semi-trailer.” (Doc. # 62 at 4.)

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FURTHER ORDERED that, in light of the foregoing analysis, Defendant’s
“Motion for Dismissal” (Doc. # 68) is DENIED AS MOOT.
DATED: March

07

, 2013
BY THE COURT:

_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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