Arkema Inc. et al v. Arcelormittal USA Inc et al

Filing 86

ORDER granting in part and denying in part 17 Motion to Dismiss for Failure to State a Claim. Plaintiffs' Count I is dismissed. Signed by Chief Judge David R. Herndon on 6/28/2013. (mtm)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
ARKEMA INC. and OZARKMAHONING COMPANY,
Plaintiffs,
v.
AMMIN HOLDINGS INC,
Defendant.

12-cv-1022-DRH-DGW
MEMORANDUM and ORDER

HERNDON, Chief Judge:
I. Introduction
Now before the Court is defendant Ammin Holdings, Inc.’s motion to
dismiss all counts of plaintiffs Arkema Inc. and Ozark-Mahoning
Companys’ complaint pursuant to FEDERAL RULE

OF

CIVIL PROCEDURE

12(b)(6) (Doc. 17). As Arkema Inc. and Ozark-Mahoning Company have
responded in opposition (Doc. 38) and provided a supplemental response
(Doc. 57), this dispute is ripe for judicial resolution. Based on the following,
the Court GRANTS in part and DENIES in part the motion (Doc. 17).
II. Background
Prior to this filing of the instant action, plaintiffs Arkema Inc. and
Ozark-Mahoning Company (collectively, plaintiffs) were defendants in an
action before this Court brought by the State of Illinois, pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA), 42 U.S.C. § 9601, et seq., the Illinois Environmental Protection
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Act, 45 ILCS 5/1, et seq., and Illinois common law. See State ex rel.
Madigan v. Alcoa Inc., et al., 09-cv-392-DRH-PMF (S.D. Ill. 2009). The
State of Illinois sought past and future response costs, declaratory relief,
and injunctive relief incurred from the release or threatened release of
hazardous substances arising from the mining and milling operations in
and around Rosiclare, Hardin County, Illinois (09-cv-392, Doc. 3). Every
defendant, including plaintiffs herein, entered into a consent decree
requiring them to perform certain remedial investigations and feasibility
studies of certain areas of concerns (AOC) and perform additional removal
actions with respect to AOC1 (Doc. 2, p. 2).

This Court approved the

consent decree on September 24, 2009 (09-cv-392, Doc. 18).
Thereafter, on September 21, 2012, plaintiffs filed the three count
complaint currently before the Court (Doc. 2). The complaint seeks cost
recovery and contribution resulting from the release or threatened release
of hazardous substances at the “Rosiclare Site in Rosiclare, Hardin County,
Illinois (the ‘Site’),” pursuant to CERCLA (Doc. 2, p. 1). Thus, plaintiffs
bring Count I for recovery of response costs under CERCLA § 107(a), Count
II for contribution under CERCLA § 113(f), and finally Count III for a
declaratory judgment under CERCLA § 113(g)(2).
Initially, plaintiffs brought all three counts against the following
defendants: Arcelormittal USA Inc., Rosiclare Lead and Fluorspar Mining
Company, ON Marine Services Company LLC, the Estate of Jack L.

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Quarant, Ammin Holdings, Inc. (Ammin), and Prince Minerals, Inc.
However, since the filing on their complaint, plaintiffs and all defendants,
except Ammin, have finalized settlements and the settling defendants have
been dismissed from this action with prejudice (Doc. 85).

Accordingly,

Ammin’s motion to dismiss all counts of plaintiffs’ complaint is the only
motion pending before the Court (Doc. 17). 1
III. Legal Standard
A Rule 12(b)(6) motion challenges the sufficiency of the complaint to
state a claim upon which relief can be granted. Hallinan v. Fraternal Order
of Police Chicago Lodge 7, 570 F.3d 811, 820 (7th Cir. 2009). The
Supreme Court explained in Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570 (2007), that Rule 12(b)(6) dismissal is warranted if the complaint fails
to set forth “enough facts to state a claim to relief that is plausible on its
face.”
In making this assessment, the district court accepts as true all wellpled factual allegations and draws all reasonable inferences in the plaintiff's
favor. See Rujawitz v. Martin, 561 F.3d 685, 688 (7th Cir. 2009); St.
John's United Church of Christ v. City of Chicago, 502 F.3d 616, 625 (7th
Cir. 2007).
Even though Twombly (and Ashcroft v. Iqbal, 556 U.S. 662 (2009))
retooled federal pleading standards, notice pleading remains all that is

1

Thus, the settling-defendants’ previously filed motions to dismiss were rendered moot
when the Court dismissed the settling defendants with prejudice (Docs. 35, 48, and 67).

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required in a complaint. “A plaintiff still must provide only ‘enough detail to
give the defendant fair notice of what the claim is and the grounds upon
which it rests and, through his allegations, show that it is plausible, rather
than merely speculative, that he is entitled to relief.’” Tamayo v.
Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008). The level of detail the
complaint must furnish can differ depending on the type of case before the
Court. So for instance, a complaint involving complex litigation (antitrust or
RICO claims) may need a “fuller set of factual allegations . . . to show that
relief is plausible.” Id. at 1083 (citing Limestone Dev. Corp. v. Village of
Lemont, Illinois, 520 F.3d 797, 803–04 (7th Cir. 2008)).
The Seventh Circuit has offered further direction on what (postTwombly & Iqbal ) a complaint must do to withstand dismissal for failure
to state a claim. In Pugh v. Tribune Co., 521 F.3d 686, 699 (7th Cir. 2008),
the Court reiterated: “surviving a Rule 12(b)(6) motion requires more than
labels and conclusions;” the allegations must “raise a right to relief above
the speculative level.” Similarly, the Court remarked in Swanson v.
Citibank, N.A., 614 F.3d 400, 403 (7th Cir. 2010): “It is by now well
established that a plaintiff must do better than putting a few words on
paper that, in the hands of an imaginative reader, might suggest that
something has happened to her that might be redressed by the law.”
Judge Posner explained that Twombly and Iqbal:
require that a complaint be dismissed if the allegations do not
state a plausible claim. The Court explained in Iqbal that “the
plausibility standard is not akin to a ‘probability requirement,’
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but it asks for more than a sheer possibility that a defendant
has acted unlawfully.” Id. at 1949. This is a little unclear
because plausibility, probability, and possibility overlap.
.

.

.

But one sees more or less what the Court was driving at: the
fact that the allegations undergirding a plaintiffs claim could be
true is no longer enough to save it. . . . [T]he complaint taken
as a whole must establish a nonnegligible probability that the
claim is valid, though it need not be so great a probability as
such terms as “preponderance of the evidence” connote . . .
After Twombly and Iqbal a plaintiff to survive dismissal “must
plead some facts that suggest a right to relief that is beyond the
‘speculative level.’” In re marchFIRST Inc., 589 F.3d 901, 905
(7th Cir. 2009).

Atkins v. City of Chicago, 631 F.3d 823, 831–32 (7th Cir. 2011) (emphasis
added); see also Smith v. Med. Benefit Admin’rs. Group, Inc., 639 F.3d
277, 281 (7th Cir. 2011) (Plaintiff's claim “must be plausible on its face,”
that is, “The complaint must establish a nonnegligible probability that the
claim is valid.”). With these principles in mind, the Court turns to the
allegations of plaintiffs’ complaint.
IV. Analysis
1. Count 1: CERCLA § 107(a), 42 U.S.C. § 9607(a)
Plaintiffs’ Count I seeks cost recovery under CERCLA § 107. Under §
107, one potentially responsible party (PRP) has the same rights as an
innocent party to sue another PRP for cleanup costs incurred in a removal
or remedial action. See United States v. Atl. Research Corp., 551 U.S. 128,
135-36 (2007) (interpreting 28 U.S.C. § 9607(a)(4)(B)). To compare, § 113,

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CERCLA’s

contribution

provision,

creates

two

distinct

rights

to

contribution, subject to distinct prerequisites. See 42 U.S.C. § 9613;
Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 166 (2004). Under
42 U.S.C. § 9613(f)(1),
Any person may seek contribution from any other person who
is liable or potentially liable under section 9607(a) of this title,
during or following any civil action under section 9606 of this
title or under section 9607(a) of this title.
While under 42 U.S.C. § 9613(f)(3)(B),
A person who has resolved its liability to the United States or a
State for some or all of the costs of such action or for some or
all of the costs of such action in an administrative or judicially
approved settlement may seek contribution from any person
who is not a party to a settlement referred to in paragraph (2). 2
In reliance on persuasive authority from sister circuits, Ammin
argues a § 107 claim is foreclosed to plaintiffs, because a § 113 claim for
contribution is available to them. See Solutia v. McWane, Inc., 672 F.3d
1230 (11th Cir. 2012); Morrison Enters., LLC v. Dravo Corp., 638 F.3d
594, 602-604 (8th Cir. 2011); Niagara Mohawk Power Corp. v. Chevron
U.S.A., Inc., 596 F.3d 112, 127-28 (2d Cir. 2010); see also Agere Sys. v.
Advanced Envtl. Tech. Corp., 602 F.3d 204, 225-26 (3d Cir. 2010). At the

2

Paragraph (2) is CERCLA’s “contribution bar” provision, stating:
A person who has resolved its liability to the United States or a State 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 of the other potentially liable
persons unless its terms so provide, but it reduces the potential liability of
the others by the amount of the settlement.

42 U.S.C. § 9613(f)(2).

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time plaintiffs initially responded to Ammin’s motion, the Seventh Circuit
had not directly addressed whether a plaintiff is limited to a contribution
claim under § 113 when one is available. Thus, plaintiffs opposed Ammin’s
arguments.
Shortly thereafter, the Seventh Circuit decided Bernstein v. Bankert,
702 F.3d 964 (7th Cir. 2012). In Bernstein, the Seventh Circuit endorsed
“limiting a plaintiff to one form of CERCLA action” due to the “procedural
distinctness of the remedies.” 702 F.3d at 989. The court went on to state,
Through SARA, Congress intentionally amended CERCLA to
include express rights to contribution, subject to certain
prerequisites. If § 9607(a) already provided the rights of action
contemplated by the SARA amendments, then the amendments
were just so many superfluous words. The canons of statutory
construction counsel against any interpretation that leads to
that result.
Id. (citing Niagara Mohawk, 596 F.3d at 128; Hibbs v. Winn, 542 U.S. 88,
101 (2004)). In sum, the Seventh Circuit stated, “the Trustees have a
contribution action under § 9613(f)(3)(B). And although, giving the words
their plain meaning, they have also incurred ‘necessary costs of response,’
see § 9607(a)(4)(B), as is required to sustain a cost recovery action, we
agree with our sister circuits that a plaintiff is limited to a contribution
remedy when one is available.” 702 F.3d at 980.

Plaintiffs have filed a

supplemental response acknowledging this Court’s obligation to implement
Bernstein, while noting disagreement with its holdings (Doc. 57). Ammin
additionally responds that Bernstein precludes plaintiffs’ § 107 claim (Doc.

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60). Thus, in light of Bernstein, plaintiffs’ § 107 claim seemingly requires
dismissal, provided a contribution remedy is available to them. Id.
As to whether a contribution remedy is available to plaintiffs, the
Court first notes plaintiffs inconsistently allege under which contribution
provision they bring their claim: § 113(f)(1) or § 113(f)(3)(B). The heading
of Count II references § 113(f)(3)(B). However, plaintiffs’ supplemental
response says this was a mistake and that the facts state a claim pursuant
to § 113(f)(1) (Doc. 57, p. 2 n. 1). On the other hand, plaintiffs’ initial
response in opposition to Ammin’s motion solely references § 113(f)(3)(B)
(Doc. 38, pp. 8-9). Ammin’s arguments for dismissal do not reference the
separate prerequisites for recovery under § 113(f)(1) or § 113(f)(3)(B).
However, in reliance on the parties’ arguments, it appears undisputed that
a contribution claim under § 113 is at least “available” to plaintiffs. On this
basis, and due to the limited arguments before it, the Court GRANTS
Ammin’s motion to dismiss Count I under § 107(a) without prejudice.
2. Counts II and III: CERCLA § 113
Ammin argues that plaintiffs’ Counts II and III fail because their
allegations “amount to nothing more than a generic recital of some (but not
all) of the required legal elements of a CERCLA claim” (Doc. 17, p. 6).
Plaintiffs’ complaint contains the following pertinent allegations:

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Estate of Jack L. Quarant
34. Jack L. Quarant (“Quarant”), who was a resident of
Rosiclare, Illinois, purchased the Fairview Mine and mill (the
“Fairview Property”) in or about 1969.
35. On or about October 7, 1972 Quarant sold a portion of the
Fairview Property to American Minerals, Inc. (“AMI”).
.

.

.

Ammin Holdings, Inc.
38. [Ammin] is a Delaware Corporation with its principal place
of business in Rosiclare, Illinois.
39. AMI owned and/or operated its portion of the Fairview
Property during periods of time in which there were releases of
Hazardous Substances at or from that property.
40. Ammin is a successor-in-interest to AMI.
41. Ammin is the current owner of a portion of the Site and
is[sic] an owner of a portion of the Site at the time of releases
of Hazardous Substances at or from the Site.
The crux of Ammin’s argument is that plaintiffs have failed to
sufficiently allege Ammin is a “covered person” under 42 U.S.C. § 9607(a).
Of the four categories of “covered persons” described in § 9607(a), plaintiffs
and Ammin cite owner and operator liability as the basis of Ammin’s
potential liability. See 42 U.S.C. § 9607(a)(1). Under § 9607(a)(1), a
“covered person” includes “the owner or operator of a vessel or a facility.”
Id.
Ammin characterizes the complaint as merely alleging that “AMI’s
former operations resulted in releases on or from the Fairview Property,”

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instead of necessarily alleging that “AMI’s former operations caused or
contributed to a release of hazardous substances at the Site” (Doc. 17, p. 7)
(emphasis added). Thus, Ammin argues that because plaintiffs do not allege
that AMI’s portion of the Fairview Property is a part of the Site as defined
by the consent decree approved by this Court in Alcoa Inc., 09-cv-392,
plaintiffs’ complaint must fail.
Plaintiffs respond that the complaint alleges that the Site, described
in the complaint as the “Rosiclare Site in Rosiclare, Hardin County,
Illinois,” is a “facility,” under CERCLA § 101(9), 42 U.S.C. § 9601(9) (Doc.
2, p. 2). With respect to Ammin, plaintiffs allege that Ammin is a successor
in interest to AMI which “owned and/or operated its portion of the Fairview
Property during periods of time in which there were releases of Hazardous
Substances at or from that property” and that “Ammin is the current owner
of a portion of the Site and is[sic] an owner of a portion of the Site at the
time of releases of Hazardous Substances at or from the Site” (Doc. 2, p. 6).
Thus, plaintiffs argue they have sufficiently alleged that Ammin is a
“covered person” under § 107(a)(1). See 42 U.S.C. § 9607(a)(1).
Ammin requests that this Court interpret the consent decree entered
in Alcoa Inc., 09-cv-392, as holding Ammin is not in fact a “current owner
of a portion of the Site,” as plaintiffs’ complaint alleges, and find that
Ammin is not a “covered person.” While the Court notes that the consent
decree at issue is likely part of the pleadings in this action, see Venture

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Assoc v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993), the
Court will not, at this stage, engage in an interpretation of the consent
decree and thus, by Ammin’s characterization, contradict a factual
allegation of the complaint. Accepting as true all well-pled factual
allegations and drawing all reasonable inferences in plaintiffs’ favor, see
Rujawitz, 561 F.3d at 688, the Court finds that plaintiffs have sufficiently
alleged that Ammin is a “covered person,” see 42 U.S.C. § 9607(a), under
the standards applicable to a Rule 12(b)(6) motion.
Finally, in reliance on Kalamazoo River Study Group v. Menasha
Corp., 228 F.3d 648, 655 (6th Cir. 2000), Ammin makes a half-hearted
attempt at arguing plaintiffs have inadequately pled a “causal nexus”
between the release of hazardous substances and resulting response costs
at Ammin’s property. In Kalamazoo, the Sixth Circuit noted, “[i]t is clear
from the text, structure, and legislative history of § 107 that the provision
does not require a plaintiff to show that a particular defendant caused
either the release or the incurrence of response costs in order to prove
liability.” Id. (citation omitted). The court further explained, “the text of §
107 imposes no such causation requirement on its face. Rather, the text
requires only that a plaintiff prove ‘that the defendant’s hazardous
substances were deposited at the site from which there was a release and
the release caused the incurrence of response costs.’” Id. (citing United
States v. Alcan Aluminum Corp., 964 F.2d 252, 266 (3d Cir. 1992)

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(emphasis in original)). “The liability standard for contribution claims is the
same as the standard for cost recovery claims.” Id. at 656. Thus, “[b]ecause
causation is not an element of liability under § 107, and because § 107
defines the liability standard applicable in actions brought pursuant to §
113, then a § 113 plaintiff need not prove causation in order to establish a
defendant’s liability.” Id.
Plaintiffs’ complaint alleges, “[r]eleases or threatened releases of
Hazardous Substances at or from the Site have caused Plaintiffs to incur
Response Costs” (Doc. 2, p. 3). Once again, plaintiffs’ complaint states,
“AMI owned and/or operated its portion of the Fairview Property during
periods of time in which there were releases of Hazardous Substances at or
from that property.” “Ammin [AMI’s successor in interest] is the current
owner of a portion of the Site and is[sic] a owner of a portion of the Site at
the time of releases of Hazardous Substances at or from the Site” (Doc. 2,
p. 6). Further, Count II alleges that plaintiffs “are entitled to contribution
from Defendants for response costs incurred and for future response costs
to be incurred by Plaintiffs in connection with the Site” (Doc. 2, p. 8). On
the basis of the above allegations, the Court finds plaintiffs have sufficiently
alleged the requisite “causal nexus” of a contribution claim under § 113.
See Twombly, 550 U.S. at 570; Iqbal, 556 U.S. at 678-79. Thus, for the
reasons stated above, and based solely on Ammin’s limited arguments,

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Ammin’s request that the Court dismiss plaintiffs’ Counts II and III is
DENIED.
V. Conclusion
For the reasons stated above, the Court GRANTS in part and
DENIES in part Ammin’s motion to dismiss plaintiffs’ complaint (Doc. 17).
Plaintiffs’ Count I is dismissed without prejudice. Ammin’s request as to
Counts II and III is DENIED.
IT IS SO ORDERED.

David R.
Herndon
2013.06.28
13:17:03 -05'00'

Signed this 28th day of June, 2013.

Chief Judge Herndon
United States District Court

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