United States Of America v. Saporito et al

Filing 171

MEMORANDUM Opinion and Order Written by the Honorable Gary Feinerman on 6/22/2011.Mailed notice.(jlj)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
vs.
JAMES Y. SAPORITO and PAUL CARR,
Defendants.

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07 C 3169
Judge Feinerman

MEMORANDUM OPINION AND ORDER
The United States brought this action against James Saporito and Paul Carr under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(“CERCLA”), 42 U.S.C. § 9601 et seq., seeking to recover the costs the government incurred in
cleaning up hazardous substances at Crescent Plating Works, an electroplating facility in
Chicago. In March 2008, the court denied Defendants’ motion to dismiss. Docs. 17-18
(Pallmeyer, J.). On December 2, 2008, the court granted the parties’ joint motion to bifurcate the
proceedings, with the first phase addressing whether Defendants are liable under CERCLA, and
the second addressing what cleanup costs, if any, the government may recover. Doc. 60
(Pallmeyer, J.).
The two defendants then took divergent paths. Carr and the government settled, and an
agreed consent decree was entered. Docs. 142, 146. Saporito did not settle, and the court
granted the government’s motion for summary judgment, holding that Saporito was a
responsible party under section 107(a) of CERCLA, 42 U.S.C. § 9607(a), and thus liable for the
government’s response costs. 684 F. Supp. 2d 1043 (N.D. Ill. 2010) (Pallmeyer, J.). Saporito

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and the government then conducted discovery concerning the propriety and amount of the
government’s cleanup activities and costs. Before the court is the government’s motion for
summary judgment in an amount certain, seeking an award of $2,564,709.86 plus statutory
interest accruing since June 21, 2010. The government also seeks a declaratory judgment that
Saporito is jointly and severally liable for “future” response costs, meaning all costs incurred
after February 28, 2010—the latest date included in the government’s cost calculations—plus
statutory interest on those amounts. The government’s motion is granted.
Discussion
Familiarity with the court’s liability opinion, which sets forth the pertinent facts, is
assumed. CERCLA establishes a comprehensive response mechanism to mitigate environmental
damages created by the release or threatened release of hazardous substances into the
environment. See Metro. Water Reclamation Dist. of Greater Chicago v. N. Am. Galvanizing &
Coatings, Inc., 473 F.3d 824, 826-27 (7th Cir. 2007). CERCLA shifts the costs of cleanup to the
parties responsible for the contamination. See 42 U.S.C. § 9607(a). “[L]iability under
[CERCLA] is strict, joint and several. In other words, … the [government] may recover its costs
in full from any responsible party, regardless of that party’s relative fault.” Metro. Water, 473
F.3d at 827.
A responsible party must reimburse “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)(4)(A); see Burlington N. & Santa Fe Ry. Co. v. United States, 129 S. Ct. 1870,
1878 n.6 (2009). The National Contingency Plan (“NCP”) outlines specific steps the
government must take before and during its response efforts. See 40 C.F.R. pt. 300.
Governmental cleanup activities and their attendant costs are presumed to be consistent with the
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NCP, see United States v. E.I. DuPont De Nemours & Co., 432 F.3d 161, 178 (3d Cir. 2005) (en
banc); United States v. Hardage, 982 F.2d 1436, 1442 (10th Cir. 1992), and the responsible party
bears the burden of proving otherwise, see United States v. Chapman, 146 F.3d 1166, 1169 (9th
Cir. 1998); Hardage, 982 F.2d at 1442; United States v. Ne. Pharm. & Chem. Co., Inc., 810 F.2d
726, 747 (8th Cir. 1986).
Saporito has been found liable as a current owner of Crescent Plating facilities, and thus
is a responsible party under section 107(a) of CERCLA. 684 F. Supp. 2d at 1063. He therefore
is jointly and severally liable for all the government’s costs unless he demonstrates that
particular cleanup activities and their attendant costs were inconsistent with the NCP. Saporito
challenged nearly all of the government’s claimed cleanup costs, attorney fees, and oversight
costs. His arguments are considered in turn.
I.

Cleanup Costs
A.

Statute of Limitations

CERCLA requires the government to file suit “within 3 years after completion of the
removal action.” 42 U.S.C. § 9613(g)(2)(A). Saporito asserts that because the government was
authorized to make expenditures as early as December 2003, it had to file suit by December
2006. The argument is defeated by the statute’s plain text. In saying that a cost recovery suit
must commence within three years “after completion” of the removal action, § 9613(g)(2)(A)
makes clear that the limitations period commences not when the government allocates funds to
the removal action, but when the removal action is completed. The removal action at Crescent
Plating was not completed until June 21, 2004, at the earliest, when the United States
Environmental Protection Agency (“EPA”) issued its final Pollution Report for the site. See
Illinois v. Grigoleit Co., 104 F. Supp. 2d 967, 975 (C.D. Ill. 2000) (“a ‘removal’ action is not
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complete until a document has been issued which contains the final remedy selected for the site”
or until the government ceases “to evaluate, assess and monitor the land”) (collecting cases);
United States v. Cantrell, 92 F. Supp. 2d 704, 716 (S.D. Ohio 2000) (statute of limitations did
not commence until the final “walk-through” of the site was complete); United States v. City of
Aberdeen, 929 F. Supp. 989, 993 (N.D. Miss. 1996) (statute of limitations did not commence
until all work was complete and the site was photographed). The government’s suit was filed on
June 6, 2007, less than three years later, and thus was timely.
Saporito next contends that because his liability derives solely from his ownership of
“filter press equipment, characterized as a separate ‘facility’ for CERCLA liability purposes,”
Doc. 160 at 6, and that because the filter press was dismantled by June 4, 2004, the government
had to file suit by June 3, 2007. This contention rests on an incorrect premise. As the court held
in its liability decision, the plating line was the “facility” subject to the government’s cleanup
action, and the filter press equipment owned by Saporito was merely a part of the relevant
facility. 684 F. Supp. 2d at 1056-57; see also id. at 1053 (noting that Saporito did not dispute the
plating line was a “facility”). Because the dismantling of the filter press was just one component
of a single “removal action” at Crescent Plating, it had no independent impact on the statute of
limitations. See United States v. W.R. Grace & Co., 429 F.3d 1224, 1230 n.9 (9th Cir. 2005)
(“we analyze the EPA’s activities in Libby as a single response action rather than a patchwork of
discrete smaller actions”); Colorado v. Sunoco, Inc., 337 F.3d 1233, 1240-41 (10th Cir. 2003)
(rejecting argument that the statute of limitations applied separately to each component of the
cleanup activity because “there will be but one ‘removal action’ per site or facility”); Kelley v.
E.I. DuPont De Nemours & Co., 17 F.3d 836, 843-44 (6th Cir. 1994) (“It is simply inconsistent
with [CERCLA’s] ‘essential purposes’ to require suit on each arguably independent removal
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activity.”); Yankee Gas Servs. Co. v. UGI Utils., Inc., 616 F. Supp. 2d 228, 270 (D. Conn. 2009)
(“courts have generally held that there can be only one removal … regardless of the number of
phases in which the clean-up occurs”); United States v. Nalco Chem. Co., 2002 WL 548840, at
*10-11 (N.D. Ill. Apr. 10, 2002).
B.

Commerce Clause

Saporito contends that CERCLA cannot authorize the government’s recovery of costs
because it is unconstitutional, reasoning that Congress exceeded its authority under the
Commerce Clause by empowering the EPA to regulate environmental hazards that do not “have
effects in more than one state” and to regulate “spills at a [single] Site.” Doc. 160 at 9. The
Second and Eleventh Circuits have rejected materially identical contentions. See Frier v.
Westinghouse Elec. Corp., 303 F.3d 176, 202 (2d Cir. 2002) (“even wholly intrastate disposal of
hazardous wastes can threaten interstate and foreign commerce, as those wastes can contaminate
streams that run through landfills and feed into tributaries of navigable waters”); United States v.
Olin Corp., 107 F.3d 1506, 1511 (11th Cir. 1997) (“the regulation of intrastate, on-site waste
disposal constitutes an appropriate element of Congress’s broader scheme to protect interstate
commerce and industries thereof from pollution”); see also United States v. Domenic Lombardi
Realty, Inc., 204 F. Supp. 2d 318, 328 (D.R.I. 2002) (“CERCLA’s legislative history
demonstrates that if left unregulated, on-site disposal of hazardous waste would unquestionably
affect surface and groundwater, which in turn, would substantially affect the fishing and
agriculture industries, as well as livestock production, recreation, and domestic and industrial
water supplies”). Saporito does not and could not show that the Seventh Circuit would chart a
different course. See United States v. Vasquez, 611 F.3d 325, 331 (7th Cir. 2010) (even where a
statute “regulates solely intrastate activity,” if the “regulatory means chosen are ‘reasonably
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adapted’ to the attainment of a legitimate end under the commerce power,” there is no
constitutional problem). Saporito’s Commerce Clause challenge accordingly is rejected.
C.

Consistency with the NCP

Saporito contends that most of the government’s cleanup activities were inconsistent with
the NCP. To prove that a particular cleanup activity is inconsistent with the NCP, Saporito must
demonstrate that the government acted arbitrarily and capriciously in pursuing the activity. See
Hardage, 982 F.2d at 1442. Arbitrary and capricious review “is deferential,” United States v.
Tarkowski, 248 F.3d 596, 602 (7th Cir. 2001), and acknowledges that “determining the
appropriate removal and remedial action involves specialized knowledge and expertise, [and
therefore that] the choice of a particular cleanup method is a matter within the discretion of the
EPA,” Ne. Pharm. & Chem. Co., 810 F.2d at 748. See Wash. State Dep’t of Transp. v. Wash.
Natural Gas Co., Pacificorp, 59 F.3d 793, 802 (9th Cir. 1995); Hardage, 982 F.2d at 1442 (“We
… give deference to the EPA’s choice of response action and will not substitute our own
judgment for that of the EPA.”). Saporito’s various arguments may be categorized as follows.
1.

Proof of Substantial Threat of Harm and Causation

Saporito contends that the government “never demonstrated a substantial threat of harm”
sufficient to justify the removal action or its attendant costs. Doc. 160 at 11. Specifically, he
argues that the government failed to “tie” the substances and storage conditions at Crescent
Plating to “any imminent, substantial real-world threat or danger, as opposed to hypothetical
speculation.” Ibid. In the liability phase, Saporito similarly argued that the government failed to
prove that the relevant chemicals were hazardous, that the government failed to demonstrate an
imminent and substantial danger to the public, and that there was no evidence of a release or
threatened release. See Doc. 110 at 7-14. The court rejected these arguments, noting that (1)
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Saporito failed to “offer anything that would contradict the government’s evidence on the threat
posed by Crescent Plating’s condition”; (2) “it is undisputed that hazardous chemicals did enter
the soil”; (3) “[t]here is no genuine dispute here; chemicals found at the site have been
designated as hazardous by the EPA”; and (4) “it is undisputed that thousands of gallons of
hazardous waste were being stored unsafely … [and] that there was a threatened release at the
time of cleanup.” 684 F. Supp. 2d at 1058-59.
“The doctrine of law of the case precludes reexamining a previous ruling (unless by a
higher court) in the same case unless it was manifestly erroneous.” Starcon Int’l, Inc. v. NLRB,
450 F.3d 276, 278 (7th Cir. 2006); see also Moriarty v. Svec, 429 F.3d 710, 722-23 (7th Cir.
2005). The principle applies with particular force where, as here, a successor judge is asked to
reconsider a predecessor judge’s rulings. See Gilbert v. Ill. State Bd. of Educ., 591 F.3d 896, 902
(7th Cir. 2010) (“in general, the successor judge is discouraged from reconsidering the decisions
of the transferor judge”). A successor judge should depart from a predecessor’s decision only if
he or she has a “conviction at once strong and reasonable that the earlier ruling was wrong, and
if rescinding it would not cause undue harm to the party that had benefitted from it.” HK Sys.,
Inc. v. Eaton Corp., 553 F.3d 1086, 1089 (7th Cir. 2009). Saporito does not acknowledge Judge
Pallmeyer’s rulings regarding the threat of harm posed by the hazardous substances at Crescent
Plating, let alone demonstrate that those rulings were erroneous. It would be inappropriate to
depart from those rulings where, as here, there is no indication either that the rulings were
reached in error or that there are “considerations of fact or law that were [un]available when the
previous” decision was made. Vidimos, Inc. v. Wysong Laser Co., Inc., 179 F.3d 1063, 1065
(7th Cir. 1999).

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The same holds for Saporito’s argument that the government failed to prove causation.
He contends that the government was required to demonstrate specifically that it was his
particular equipment “from which there was a threatened release.” Doc. 160 at 16. As Judge
Pallmeyer noted in the liability ruling, however, “causation need not be proven under
CERCLA.” 684 F. Supp. 2d at 1060 (citing United States v. Capital Tax Corp., 545 F.3d 525,
530 (7th Cir. 2008); United States v. Hercules, Inc., 247 F.3d 706, 716 (8th Cir. 2001) (“once the
requisite connection between the defendant and a hazardous waste site has been established … it
is enough that response costs resulted from ‘a’ release or threatened release—not necessarily the
defendant’s release or threatened release”)). Saporito intimates that Judge Pallmeyer’s ruling
was wrong, arguing that he cannot be forced to pay cleanup costs given that his filter press was
not specifically identified as the cause of the government’s cleanup action. Doc. 160 at 16-17.
But it is Saporito who is wrong. Because Saporito owned necessary components (including, but
not limited to, the filter press) of the plating line and the plating line was identified as the cause
of the cleanup action, 684 F. Supp. 2d at 1051, 1056-57, the necessary connection between
Saporito and the release has been established. See Metro. Water, 473 F.3d at 827 (“the
[government] may recover its costs in full from any responsible party, regardless of that party’s
relative fault”); Hercules, 247 F.3d at 716.
2.

Workplace, Consumer Use, and Asbestos Exceptions

Saporito next contends that the EPA “has no inter-workplace removal rights, especially
for consumer products that can be put to consumer use.” Doc. 160 at 13. This argument is most
easily understood as having three separate components.
The first component turns on what Saporito believes to be a prohibition against removal
activities when the “release” involves consumer products in consumer use. Citing 42 U.S.C.
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§ 9601(9), Saporito maintains that CERCLA’s “definition of ‘release’ … ‘does not include any
consumer product in consumer use.’” Ibid. This supposed definition, in turn, prohibits the
government from removing “useful” materials, or materials “consumed by business,” during
cleanup activities, and from predicating CERCLA liability on the release of such materials. Id.
at 13-14. Because the government did not differentiate between chemicals and equipment that
could be resold to electroplating businesses and chemicals, on the one hand, and equipment
devoid of commercial value, on the other, Saporito argues that the government’s removal
activities were arbitrary and capricious.
This submission rests on a false premise. Section 9601(9) defines “facility,” not
“release.” It states:
The term “facility” means (A) any building, structure, installation,
equipment, pipe or pipeline … well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B)
any site or areas where a hazardous substance has been deposited, stored,
disposed of, or placed, or otherwise come to be located; but does not
include any consumer product in consumer use or any vessel.
42 U.S.C. § 9601(9) (emphasis added). Contrary to Saporito’s suggestion, CERCLA’s definition
of “release” makes no reference to consumer products in consumer use. Id. at § 9601(22).
Saporito’s argument regarding consumer use, therefore, “does excessive violence to the statutory
language. The [consumer use] exception is for facilities that are consumer products in consumer
use, not for consumer products contained in facilities.” Amcast Indus. Corp. v. Detrex Corp., 2
F.3d 746, 750 (7th Cir. 1993) (emphasis altered); see also Uniroyal Chem. Co., Inc. v. Deltech
Corp., 160 F.3d 238, 252 (5th Cir. 1998). Because neither the Crescent Plating plating line nor
its buildings—the facilities from which the threat of release emanated—were consumer products
in consumer use, Saporito cannot seek refuge in the “consumer product in consumer use”
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exception. And because the government undertook its cleanup activities in response to a
threatened release from actual facilities, and not releases from consumer products in consumer
use, Saporito’s attempt to invoke the exception fails.
The second component of Saporito’s argument submits that CERCLA does not authorize
removal actions where the release results in exposure exclusively within a workplace. The court
rejected this submission during the liability phase, 684 F. Supp. 2d at 1058 n.4, and rightly so.
CERCLA excludes from the statutory definition of “release” “any release which results in
exposure to persons solely within a workplace, with respect to a claim which such persons may
assert against the employer of such persons.” 42 U.S.C. § 9601(22)(A) (emphasis added). As
Judge Pallmeyer explained, Saporito cannot benefit from this exclusion because this case does
not involve a claim by a person against her employer. 684 F. Supp. 2d at 1058 n.4. Saporito
reiterates his position during the cost phase, this time relying on language in 40 C.F.R. § 300.5
identical to the language from 42 U.S.C. § 9601(22)(A) that Judge Pallmeyer considered.
Saporito’s effort to pour old wine into a new bottle is rejected. See Gilbert, 591 F.3d at 902.
The third component of Saporito’s argument submits that the government’s removal of
loose asbestos from the ground near the loading dock was arbitrary and capricious because (1)
the asbestos was once part of Crescent Plating’s structures and (2) its release would result in
exposure only within the building. In support, Saporito cites 42 U.S.C. § 9604(a)(3)(B), which
states: “The President shall not provide for a removal or remedial action under this section in
response to a release or threat of release from products which are part of the structure of, and
result in exposure within, residential buildings or business or community structures.” The
government concedes that it could not predicate a removal action exclusively on the presence or

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release of asbestos insulation within a building, but argues that it may remove asbestos found on
the floor while removing other hazardous substances.
The government is correct. The removal activities at Crescent Plating overwhelmingly
were directed at the “thousands of gallons of hazardous waste … being stored unsafely” in a
deteriorating, unheated, and unsecured building. 684 F. Supp. 2d at 1059. The incidental
removal of loose asbestos while cleaning up that waste was permissible, not arbitrary and
capricious. See United States v. Odabashian, 2005 WL 742158, at *4 n.3 (W.D. Tenn. Mar. 29,
2005) (responsible parties may have to pay for certain cleanup activities “incidental to the
removal of hazardous substances,” particularly where the defendant “presented no evidence that
the removal of [the complained of] pollutants and contaminants was not incidental to the
removal”); United States v. W.R. Grace & Co.-Conn., 280 F. Supp. 2d 1149, 1175 (D. Mont.
2003) (“So long as EPA’s response action was undertaken in response to releases and threats of
releases associated with mined and processed vermiculite, the alleged incidental removal of
some naturally occurring asbestos is not inconsistent with the NCP.”); see also 40 C.F.R. § 302.4
(listing asbestos as a “hazardous substance” under CERCLA).
Saporito’s sole authority to the contrary is inapposite. In Sycamore Industrial Park
Associates v. Ericsson, Inc., 546 F.3d 847 (7th Cir. 2008), Ericsson sold Sycamore a building
that contained asbestos. Decades after the purchase, Sycamore removed the asbestos and sought
to hold Ericsson liable under CERCLA for its removal costs. The Seventh Circuit rejected the
claim because Sycamore failed to present evidence that asbestos was threatening release outside
the building and because any asbestos emissions within the building could not impose CERCLA
liability. Id. at 852-53. As Judge Pallmeyer correctly held, Sycamore is “readily
distinguishable” from this case. 684 F. Supp. 2d at 1059. The Sycamore plaintiff sought
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removal costs related to asbestos materials that were stored within a secure building and did not
threaten release. Here, there is “undisputed evidence of the deteriorating state of Crescent
Plating’s floor,” ibid., and evidence that asbestos was lying next to a loading dock entrance, was
being stepped in and spread around, and was at risk of being carried or tracked out of the
building. Doc. 163 at ¶ 30. The removal of the asbestos was incidental to and only a small
fraction of the removal activities at Crescent Plating, by contrast to the situation in Sycamore,
where cleaning up asbestos was the principal focus of the cleanup.
3.

Reportable Quantities

Saporito contends that the government cannot recover costs because it did not determine
that the hazardous substances at Crescent Plating were present in reportable quantities, meaning
quantities that presented an imminent danger to human health. Unless such a determination is
required and made, he submits, the government could remove “vitamins from a medicine chest,
dig up soil around a home, or eliminate flaking paint from a garage door” because vitamins, soil,
and paint contain minerals that can be deemed hazardous substances. Doc. 160 at 15.
As Saporito acknowledges, Judge Pallmeyer twice rejected this argument. Doc. 18 at 8
(citing cases); 684 F. Supp. 2d at 1058. He offers nothing to justify a different result here. To
the contrary, the law clearly provides that the “reportable quantities” concept has no relation to
when a government can take a removal action. CERCLA references reportable quantities only to
indicate when a “person in charge of … an onshore facility shall” report a release to the
government. 40 C.F.R. § 302.6(a); see Sierra Club v. Seaboard Farms Inc., 387 F.3d 1167,
1168-69 (10th Cir. 2004). At the same time, CERCLA authorizes the government to effectuate a
response action “if there is a reasonable basis to believe there may be a release or threat of
release of a hazardous substance or pollutant or contaminant.” 42 U.S.C. § 9604(e)(1),
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(e)(3)(D). The “reasonable basis” requirement is satisfied even if the threatened release is not a
reportable quantity and instead involves only a “thimbleful” or a “flake” of hazardous substance.
Tarkowski, 248 F.3d at 599 (“there is nothing in [CERCLA] about [the] magnitude” of an
actionable release).
Saporito’s concern that this holding would grant “near-unlimited police power” to the
EPA is unwarranted. The government may access property in non-emergency conditions only if
the owner consents or, if consent is denied, a judicial order authorizes access. See id. at 599-600
(refusing to issue a judicial order where there was not “even a slight environmental hazard”); 42
U.S.C. § 9604(e)(5)(B)(i) (courts may allow government access to property “unless under the
circumstances of the case the demand for entry or inspection is arbitrary and capricious, an abuse
of discretion, or otherwise not in accordance with law”). Here, Saporito personally granted the
government access to the Crescent Plating site. Doc. 108-4 at 77.
4.

Saporito’s Lack of Funds

Saporito argues that because the government was aware that he could not reimburse it for
cleanup costs and would declare bankruptcy if costs were sought, the government “acted
arbitrarily and capriciously in failing to consider cost, and by choosing remedial efforts that
plainly were not cost-effective.” Doc. 160 at 17. The fact that Saporito has limited funds or is
teetering near the edge of bankruptcy does not render improper the government’s cleanup
activities or arbitrary its judicial enforcement efforts. The “recoupment mandate interjects a
valuable deterrence element into the CERCLA scheme, ensuring that responsible parties will be
held accountable for their environmental misdeeds” even if they seek bankruptcy protection.
United States v. Nicolet, Inc., 857 F.2d 202, 209-210 (3d Cir. 1988) (noting that “it was
Congress’ intent that [CERCLA] proceedings such as this be exempt from the [Bankruptcy
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Code’s] automatic stay [provision] up to and including entry of a monetary judgment”); see also
Signature Combs, Inc. v. United States, 253 F. Supp. 2d 1028, 1040 (W.D. Tenn. 2003) (“in
evaluating whether to favor slightly the interests of CERCLA (and thus the creditor) or
bankruptcy law (and thus the debtor), the fact that debtors may abuse bankruptcy discharges to
hide from liability presents more of a concern than the likelihood that the EPA (or other
creditors) will abuse their power”); United States v. Acme Solvents Reclaiming, Inc., 154 B.R.
72, 74-75 (N.D. Ill. 1993). It follows that Saporito’s financial condition and possible bankruptcy
do not bear on the propriety of the government’s response and enforcement actions. See City of
New York v. Exxon Corp., 932 F.2d 1020, 1024 (2d Cir. 1991) (responsible party’s bankruptcy
does not affect suits to recover response costs because “[t]hey provide an effective deterrent to
violators, who will be forced to pay for the government’s costs in responding to their violations.
The need to continue such deterrent actions, despite the pendency of a bankruptcy action,
furthers the purpose” of CERCLA and bankruptcy law); see also Hardage, 982 F.2d at 1443
(removal actions need not be cost effective); United States v. Martell, 844 F. Supp. 454, 459
(N.D. Ind. 1994) (“CERCLA does not require the Government to mitigate response costs”).
5.

Availability of Alternative Remedies

Saporito incorrectly maintains that the government’s failure to consider alternative
remedies prevents the recovery of costs. Doc. 160 at 17 n.5. Courts may not second guess the
government’s response actions unless the responsible party can demonstrate that the actions
were arbitrary and capricious, and thus inconsistent with the NCP. As the Eighth Circuit
explained, “the appropriate removal and remedial action involves specialized knowledge and
expertise, [and therefore] the choice of a particular cleanup method is a matter within the
discretion of the EPA.” Ne. Pharm. & Chem. Co., 810 F.2d at 748; see also Wash. Natural Gas,
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59 F.3d at 802; Hardage, 982 F.2d at 1442 (“We … give deference to the EPA’s choice of
response action and will not substitute our own judgment for that of the EPA.”). And as
discussed throughout this opinion, Saporito has failed to demonstrate that the government’s
cleanup activities were arbitrary and capricious.
6.

Settlement and Consent Decree with Defendant Carr

Saporito suggests that the government acted improperly by settling with Defendant Carr
(Docs. 142, 146) in a way that released Carr from any obligation to pay response costs.
Saporito’s suggestion is without merit. The consent decree with Carr provides, in relevant part:
“Based on the analysis of Financial Information submitted by [Carr], the United States has
determined that [Carr] lacks the present and foreseeable future ability to reimburse the United
States for any Response Costs. Therefore, this Consent Decree does not require [Carr] to pay
any Response Costs.” Doc. 146 at 10. CERCLA permitted the government to settle with Carr
on those terms. See 42 U.S.C. § 9622(g)(7).
Carr’s settlement and consent decree do not impact Saporito’s liability to the
government. CERCLA provides that a “person who has resolved its liability to the United States
… in an administrative or judicially approved settlement shall not be liable for claims for
contribution regarding matters addressed in the settlement. Such settlement does not discharge
any other potentially responsible persons unless its terms so provide, but it reduces the potential
liability of others by the amount of the settlement.” 42 U.S.C. § 9613(f)(2). If the government
receives less than complete relief from the settling party, “the United States may bring an action
again[st] any person who has not so resolved its liability.” United States v. Iron Mountain
Mines, 724 F. Supp. 2d 1086, 1092 (E.D. Cal. 2010); see also United States v. Occidental Chem.
Corp., 200 F.3d 143, 149-50 (3d Cir. 1999). Here, Saporito refused to settle with the
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government because he did not wish to disclose his and his spouse’s personal financial
information, fearing, for unspecified reasons, that the government would abuse that information.
Doc. 161-8 at ¶ 11. Under these circumstances, the government was entitled to sue Saporito for
its outstanding response costs.
II.

Attorney Fees and Oversight Costs
The “costs of removal or remedial action” recoverable under 42 U.S.C. § 9607(a)(4)(A)

include attorney fees and oversight costs the government incurs in overseeing removal and in
pursuing enforcement activities. See United States v. Dico, Inc., 266 F.3d 864, 878-79 (8th Cir.
2001); Chapman, 146 F.3d at 1175; United States v. Northernaire Plating Co., 685 F. Supp.
1410, 1417 (W.D. Mich. 1988). As with other removal costs, attorney fees and oversight costs
cannot be recovered to the extent they are inconsistent with the NCP. See Dico, 266 F.3d at 879
(“any attorney fees that were not reasonably incurred would be held inconsistent with the NCP”);
Hardage, 982 F.2d at 1443 (“As long as the government’s choice of response action is not
inconsistent with the NCP, its costs are presumed to be reasonable and therefore recoverable.”).
The burden on this point rests with the responsible party. See Dico, 266 F.3d at 879 (party
opposing the government’s motion for costs “bears the burden … of proving that the
government’s requested recovery costs, whether attorney fees or otherwise, are inconsistent with
the NCP”).
Citing 42 U.S.C. § 9604(c)(1)(C), Saporito argues that the government may not recover
attorney fees and oversight costs to the extent they were incurred more than twelve months after
the date of the government’s initial response, or to the extent they push the government’s overall
costs over $2 million. Doc. 160 at 18. Saporito is incorrect. Section 9604(c)(1)(C) provides
that unless the “continued response action is otherwise appropriate and consistent with the
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remedial action to be taken[,] obligations from the Fund, other than those authorized by
subsection (b) of this section, shall not continue after $2,000,000 has been obligated for response
actions or 12 months has elapsed from the date of initial response to a release or threatened
release of hazardous substances.” 42 U.S.C. § 9604(c)(1)(C) (emphasis added). Subsection (b),
in turn, references oversight and legal costs:
Whenever the President is authorized to act pursuant to subsection (a) of
this section, or whenever the President has reason to believe that a release
occurred or is about to occur, … the President may undertake such
planning, legal, fiscal, economic, engineering, architectural, and other
studies or investigations as he may deem necessary or appropriate to plan
and direct response actions, to recover the costs thereof, and to enforce the
provisions of this chapter.
42 U.S.C. § 9604(b)(1) (emphasis added). It follows that oversight and legal activities, and their
attendant costs, do not offend § 9604(c)(1)(C) if they run beyond the statute’s presumptive
twelve-month limit or push beyond the statute’s presumptive $2 million ceiling. See Chapman,
146 F.3d at 1174 (section 9604(b)(1) “entitled [the government] to recover all litigation costs,
including attorney fees” where nine years had passed since EPA first began assessment of and
response to releases at defendant’s property); United States v. Allied Battery Co., Inc., 2000 WL
34335806, at *7 (N.D. Ala. Jan. 14, 2000) (“although the actions taken under section 9604(b) are
considered to be part of the removal action, they are not subject to the 12-month funding
limitation imposed by 42 U.S.C. § 9604(c)(1)”). And it bears mention that the government
cleanup activities covered by § 9604(c)(1)(C) and not carved out by § 9604(b)(1) were
completed for under $2 million and in less than twelve months. Doc. 151 ¶¶ 12-13, 16, 21.
Saporito next challenges the recovery of attorney fees because (1) the government failed
to provide a substantive description of the activities being billed, and therefore failed to
demonstrate that the fees were incurred in furtherance of the litigation; (2) the government’s
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“time records appear to be rather inflated”; (3) the government seeks fees incurred before the suit
was filed; and (4) the government “knew at the outset” that Saporito would seek bankruptcy
protection and thus evidenced “poor billing judgment” in pursuing this lawsuit against him.
Doc. 160 at 18-19. The third and fourth arguments plainly have no merit. As noted above,
enforcing CERCLA against and seeking cleanup costs from a responsible party near bankruptcy
is not inconsistent with the NCP. Moreover, CERCLA expressly permits the government to
engage in pre-litigation legal activities, including investigation of the offending sites and
planning for future response and enforcement activities, see 42 U.S.C. § 9604(b)(1), both of
which occurred here, Doc. 162 at 18; Doc. 163 at ¶ 14. See United States v. R.W. Meyer, Inc.,
889 F.2d 1497, 1508 (6th Cir. 1989) (“the government must organize its response efforts in
accordance with the severity of the danger posed”).
Saporito’s argument that the government “inflated” its fees also fails. He asserts that
attorney fees of one million dollars are unreasonable because the case “involved little discovery
(five people were deposed) or other time and labor; non-esoteric issues; and where Plaintiff’s
fees are not really billed fees at all, counsel for [the government] are salaried government
employees.” Doc. 160 at 19. He also maintains that the time reasonably necessary to complete
motions, expert discovery, and depositions was far less than what the government billed, and that
the government cannot recover costs for lawyers who did not enter an appearance in this case.
Doc. 161 at ¶¶ 14-15. A responsible party in Saporito’s position must offer “evidence to counter
or otherwise challenge the extensive government documentation of its direct costs,” and cannot
merely offer “vague challenges to the validity of those costs based on the government’s
evidence.” R.W. Meyer, Inc., 889 F.2d at 1508. Yet Saporito’s challenges are vague and devoid
of evidentiary or legal support, consisting entirely of bald assertions and naked inferences.
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Because the government’s attorneys have been involved in this matter since 2004, and because
Saporito has aggressively litigated numerous issues in the case, Doc. 163 at ¶ 14, his contention
that the government “inflated” its fees is rejected.
Also rejected is Saporito’s complaint that the government did not provide original
invoices or detailed descriptions of its attorneys’ activities. The governing regulation provides:
During all phases of response, the lead agency shall complete and maintain
documentation to support all actions taken under the NCP and to form the
basis for cost recovery. In general, documentation shall be sufficient to
provide the source and circumstances of the release, the identity of
responsible parties, the response action taken, accurate accounting of
federal, state, or private party costs incurred for response actions, and
impacts and potential impacts to the public health and welfare and the
environment.
40 C.F.R. § 300.160(a)(1). “The regulation does not define ‘accurate accounting’ and does not
elaborate on what is meant by ‘sufficient’ documentation.” Findett, 75 F. Supp. 2d at 991 (“The
NCP simply does not contain any specific standards concerning the documentation of costs.”).
But the cases hold that the government can satisfy its burden by submitting affidavits from
government employees and summary reports of the underlying cost documentation. See
Hardage, 982 F.2d at 1442-43 (“The documentation included affidavits of various EPA and
Department of Justice (DOJ) employees charged with accumulating the cost data. These
affidavits were supported by summaries of cost data accumulated in connection with the
Hardage site, and the source of that data. The district court held, and we agree, that the
documentation offered in support of the government’s response cost claim established a prima
facie case that the government is entitled to response costs in the amount stated above.”); W.R.
Grace, 280 F. Supp. 2d at 1181 (noting that there is no requirement that the government include
“any particular document or type of document in their analysis of response cost documentation”
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and that “there is no specific standard regarding the amount of detail that must be included in
cost documentation. Courts have rejected arguments that the lack of descriptive information on
a time sheet or travel voucher regarding the underlying task the employee performed invalidates
the documentation”) (citing cases); Findett, 75 F. Supp. 2d at 992 (collecting cases).
Here, the government submitted sufficient evidentiary support for its attorney fees and
oversight costs. It offered an itemized cost summary report of employee timesheets, travel
vouchers, contractor invoices, contractor invoice approval forms, and U.S. Treasury schedules.
Doc. 151 at ¶¶ 34, 51, 56-57. It submitted declarations from an EPA supervisor who oversaw
EPA and contractor efforts at Crescent Plating, and from EPA and DOJ accountants who further
discussed, itemized, and summarized the costs incurred by the government. Doc. 151-1; Doc.
151-2; Doc. 151-3; Doc. 151-31. CERCLA requires nothing more.
Saporito contends that the government cannot recover its attorney fees because it failed
to comply with Local Rule 54.3, which imposes stringent disclosure and documentation
requirements on parties seeking to recover such fees. Local 54.3 does not govern this case.
Section 9607(a)(4)(A) provides that “‘notwithstanding any other provision or rule of law,’ a
private party will reimburse the United States for all costs incurred.” United States v.
Chromalloy Am. Corp., 158 F.3d 345, 350 (5th Cir. 1998) (quoting 42 U.S.C. § 9607(a)(4)(A)).
The “notwithstanding” clause “clearly signals the drafter’s intention that the provisions of the
‘notwithstanding’ section override conflicting provisions of any other section.” Cisneros v.
Alpine Ridge Grp., 508 U.S. 10, 18 (1993). It follows that the government need not comply with
Local Rule 54.3 when seeking to recover attorney fees in a CERCLA action. And even if Local
Rule 54.3 had some application to the attorney fee component of a CERCLA cost recovery suit,
the court would exercise its discretion to excuse formal compliance with the local rule given the
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circumstances of this case and Saporito’s full opportunity to contest the claimed attorney fees.
See Portman v. Andrews, 249 F.R.D. 279, 283 (N.D. Ill. 2007) (“to require the filing of a
detailed fee petition and further litigation on that petition would do nothing more than needlessly
impose additional costs upon [the government] without a corresponding benefit”).
Finally, Saporito argues that because the government advanced two theories of liability
during the liability phase—“Saporito-as-operator” and “equipment-as-facility”—and because
only the second theory prevailed at summary judgment, the government may recover only those
fees related to the second theory. Doc. 160 at 20. And because the government first set forth the
“equipment-as-facility” after May 2009, Saporito continues, it may not recover attorney fees
incurred before that date. Saporito cities no authority for his position, which forfeits the point.
See Arlin-Golf, LLC v. Vill. of Arlington Heights, 631 F.3d 818, 822 (7th Cir. 2011) (where party
“cited no legal authority to the district court to support the proposition … the argument is
waived”).
The argument fails on the merits in any event. Where certain claims fail and others
succeed, the prevailing party still may recovery attorney fees “for unsuccessful claims when
those claims involved a common core of facts or related legal theories.” Jaffee v. Redmond, 142
F.3d 409, 414 (7th Cir. 1998); see also Spanish Action Comm. of Chicago v. City of Chicago,
811 F.2d 1129, 1133 (7th Cir. 1987) (“time spent on related claims that ultimately prove
unsuccessful should not be automatically excluded from the attorney’s fee calculation”). As the
Seventh Circuit has explained, “[f]or tactical reasons and out of caution lawyers often try to state
their client’s claim in a number of different ways, some of which may fall by the wayside as the
litigation proceeds. … [I]f he presents a congeries of theories each legally and factually
plausible, he is not to be penalized just because some, or even all but one, are rejected, provided
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that the one or ones that succeed give him all that he reasonably could have asked for.” Lenard
v. Argento, 808 F.2d 1242, 1245-46 (7th Cir. 1987).
Here, the government advanced two theories of liability, both involving a common core
of facts (the threatened release of hazardous substances from Crescent Plating) and law (joint
and several liability under 42 U.S.C. § 9607). Although Saporito was found liable under only
one of the theories, the government received all the relief it sought and consequently may
recover all the attorney fees it incurred.
III.

“Future” Costs
The cleanup costs, attorney fees, and oversight costs discussed above were incurred

through February 28, 2010. The government also seeks a declaration that Saporito is jointly and
severally liable for all “future” costs (i.e., costs incurred after February 28, 2010) to the extent
they are not inconsistent with the NCP, plus statutory interest. That request is granted.
The law provides for, and in fact requires, a declaration as to future response costs.
CERCLA provides:
In any ... action described in this [civil proceedings] subsection, the court
shall enter a declaratory judgment on liability for response costs or
damages that will be binding on any subsequent action or actions to
recover further response costs or damages. A subsequent action or actions
under section 9607 of this title for further response costs at the vessel or
facility may be maintained at any time during the response action, but must
be commenced no later than 3 years after the date of completion of all
response action.
42 U.S.C. § 9613(g)(2) (emphasis added); see Burlington N. & Santa Fe Ry., 129 S. Ct. at 1878
(“Once an entity is identified as a [Potentially Responsible Party], it may be compelled to clean
up a contaminated area or reimburse the Government for its past and future response costs.”)
(emphasis added). Accordingly, “if a plaintiff successfully establishes liability for the response
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costs sought in the initial cost-recovery action, it is entitled to a declaratory judgment on present
liability that will be binding on future cost-recovery actions.” City of Colton v. Am. Promotional
Events, Inc.-West, 614 F.3d 998, 1007 (9th Cir. 2010); see also F.P. Woll & Co. v. Fifth &
Mitchell Street Corp., 326 Fed. Appx. 658, 661 (3d Cir. 2009) (“The entry of a declaratory
judgment ensured Woll prompt reimbursement of reasonable response costs incurred in the
future, while protecting Eaton and Fifth Street from an excess judgment in the event further
response costs were not incurred. Thus, we agree with the Court’s grant of declaratory, rather
than additional monetary, relief.”); GenCorp, Inc. v. Olin Corp., 390 F.3d 433, 451 (6th Cir.
2004) (“In the context of a [CERCLA] action, this Court has held that the entry of a declaratory
judgment as to liability is mandatory.”) (internal quotation marks omitted); Kelly v. E.I. DuPont
de Nemours & Co., 17 F.3d 836, 844 (6th Cir. 1994) (“The entry of declaratory judgment as to
liability is mandatory. The fact that future costs are somewhat speculative is no bar to a present
declaration of liability.”) (citations and quotation marks omitted); City of Gary, Ind. v. Shafer,
683 F. Supp. 2d 836, 854 (N.D. Ind. 2010) (“Once liability is established under section 107(a) of
CERCLA, section 113(g) of CERCLA requires entry of a declaratory judgment as to liability for
future response costs.”) (citing cases). If any future cost recovery action is brought, the
government will be required to identify the cleanup activities and their attendant costs, and will
be entitled to reimbursement only to the extent those activities and costs are not inconsistent with
the NCP. See Hardage, 982 F.2d at 1446 (“a declaratory judgment under CERCLA § 113(g)(2)
determines liability for future response costs, not recoverability, and therefore, a challenge to the
future response costs—i.e., that the response actions giving rise to the costs are inconsistent with
the NCP—must be allowed”).

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Conclusion
For the foregoing reasons, the government’s motion for judgment in an amount certain is
granted. James Saporito is jointly and severally liable to the United States in the amount of
$2,564,709.86, plus statutory interest accruing since June 21, 2010. In addition, the court
declares that Saporito is jointly and severally liable for Crescent Plating response costs incurred
after February 28, 2010, to the extent those costs are not inconsistent with the NCP, plus
statutory interest. The court acknowledges that this is a harsh result, but CERCLA and the
binding precedents that interpret and apply the statute impose a relatively unforgiving regime on
individuals like Saporito found to be responsible parties under 42 U.S.C. § 9607(a).

June 22, 2011
United States District Judge

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