Blue Tee Corp. v. Xtra Intermodal, Inc. et al

Filing 150

ORDER DENYING 127 MOTION for Summary Judgment filed by Gold Fields Mining, LLC, Blue Tee Corp.. ( Final Pretrial Conference set for 2/18/2016 01:30 PM in East St. Louis Courthouse before Judge David R. Herndon.). Signed by Judge David R. Herndon on 12/7/15. (klh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS

BLUE TEE CORP. and GOLD FIELDS
MINING, INC.,
Plaintiffs,
v.

No. 13-0830-DRH

XTRA INTERMODEL, INC.,
X-L-CO, INC., XTRA COMPANIES
INC., XTRA CORPORATION and
XTRA LLC.,
Defendants.
MEMORANDUM and ORDER
HERNDON, District Judge:
I.

Introduction and Background

Pending before the Court is plaintiffs’ motion for summary judgment on
contribution liability against defendants X-L-Co., Inc. and XTRA Intermodal, Inc.
(Doc. 127). Specifically, plaintiffs maintain that they are entitled to contribution
from XTRA Intermodal and X-L-Co. for costs Blue Tee incurred and Gold Fields
has paid pursuant to Section 113(f)(1), 42 U.S.C. § 9613(f)(1), of CERCLA, and a
declaratory judgment as to contribution liability pursuant to Section 113(f) of
CERCLA for costs Blue Tee will incur and Gold Fields will pay to conduct the final
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remediation of the Old American Zinc Plant site (“Site”) in Fairmont City, Illinois.
Defendants oppose the motion acknowledging that they are potentially responsible
parties but that a finding of zero liability is warranted (Doc. 143). Based on the
applicable law and the following, the Court denies the motion.
On August 13, 2013, plaintiffs, Blue Tee Corp. (“Blue Tee”) filed a five count
complaint against XTRA Intermodal, Inc. (“XTRA Intermodal”), X-L-CO., Inc.
(“X-L”), XTRA Corporation (“XTRA Corp.”), and XTRA LLC, pursuant to Sections
107 and 113 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (“CERCLA”), as amended (Doc. 2). The original complaint
sought recovery costs and contribution costs incurred or to be incurred by Blue
Tee in performing response, investigation and remedial activities at the Site (Doc.
2). Plaintiff alleged that remediation of the Site has cost it more than $4 million
and future costs are anticipated to exceed $11 million. On November 14, 2013,
Blue Tee filed an amended complaint adding two parties, plaintiff Gold Fields
Mining, LLC, and defendant XTRA Companies, Inc. (“XTRA Companies”) (Doc. 39).
On February 13, 2014, plaintiffs filed a second amended complaint (Doc. 69).
Count I is against XTRA Intermodal and X-L for cost recovery pursuant to § 107(a)
– response costs incurred; Count II is against XTRA Intermodal and X-L for
contribution; Count III is against XTRA Intermodal and X-L for declaratory
judgment; Count IV is against XTRA Intermodal and X-L for statutory and equitable
subrogation; Count V is against XTRA Corp. and XTRA LLC for cost recovery,
contribution and declaratory judgment – response costs incurred and Count VI is
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against XTRA Corp. and XTRA Companies to pierce the corporate veil.
The following allegations are taken from the second amended complaint.
Blue Tee is the successor in interest to American Zinc Company of Illinois
(“American Zinc”).

American Zinc owned the Site from 1916 to 1979. American

Zinc operated the Site as a zinc smelter from 1916 to 1953.

American Zinc

consolidated the slag or “clinker” in piles on the Site.
In 1976, defendant X-L executed a lease with American Zinc for use of the
property as a truck terminal. In 1979, X-L purchased the property. Following
the purchase of the property, defendant XTRA Intermodal expanded its operations
and X-L transferred its ownership of the property to XTRA Intermodal in 1995.
Thereafter, XTRA Intermodal ground up the stockpiled slag and clinker and
distributed it throughout the Site. XTRA Intermodal’s grinding and spreading of
slag throughout the Site resulted in blowing dust, created a nuisance, contaminated
neighboring properties and aggravated the contamination of the Site.
In 1994 and 1995, the United States Environmental Protection Agency
(“EPA”) and the Illinois Environmental Protection Agency (“IEPA”) began to
investigate the Site.

The EPA determined that XTRA Intermodal had exacerbated

conditions at the Site and issued a Unilateral Administrative Order (“UAO”) to
XTRA Intermodal directing it to participate and cooperate in the Remedial
Investigation and Feasibility Study (“RI/FS”). XTRA Intermodal violated the UAO
by failing to participate and cooperate in the RI/FS process or by failing to make a
good faith offer to contribute to the costs of the RI/FS. Most of the material to be
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consolidated on Site for the final remedy consists of about 893,000 cubic yards of
ground slag, which resulted from XTRA Intermodal’s actions. Blue Tee has made
repeated demands upon XTRA Intermodal to participate in or contribute to the
costs of remediation but XTRA Intermodal has failed and refused to contribute.
Plaintiff Gold Fields paid the costs incurred by Blue Tee for remediation at
the Site and seeks recovery pursuant to its subrogation rights under CERCLA,
Illinois law, and contract law as it may sue in Blue Tee’s name pursuant to their
agreement.
As the motion for summary judgment is ripe, the Court turns to address the
merits of the motion.
II.

Facts 1

American Zinc operated a smelter at the Site from 1916 to approximately
1953. A byproduct of American Zinc’s operations at the Site was vitrified slag.
From 1976 to 1979, X-L entered into a lease with American Zinc, then
known as AZCON Corporation, for approximately 20 acres of the site. In 1979,
X-L purchased the Site from American Zinc. With the purchase of the property,
X-L also purchased “all of the Waelz clinker and other residues, materials, or
metals located on the Site.” X-L purchased the slag at the Site to use a fill at the
Site. After the purchase of the Site, X-L expanded its trucking terminal operations
at the Site.
During X-L’s ownership or operation slag was redistributed on the surface of
1 These facts are taken from the briefs and are agreed to by the parties.

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certain portions of the Site. In 1994 and 1995, the EPA and the IEPA began to
investigate the Site in responses to complaints from area residents about blowing
dust. The EPA and the IEPA concluded that XTRA spread slag. In 1995, X-L
transferred ownership of the Site to XTRA Intermodal. XTRA Intermodal is the
present owner of the Site.
In 2002, Blue Tee executed an AOC with the EPA, which required Blue Tee to
conduct a Time Critical Removal Action at the Site. The work was conducted
primarily throughout 2002 and 2003. In 2005, Blue Tee executed a second AOC
with the EPA, which required a Remedial Investigation and Feasibility Study to be
completed. The Remedial Investigation was finished in 2009, and the Feasibility
Study was completed in 2012. The Record of Decision for the Site was issued in
2012, setting forth a remedy that is anticipated to cost more than $11.4 million.
The Site is a “facility” under CERCLA. A release or a threat of release of
hazardous substances has occurred at the Site. Through 2013, Blue Tee has
incurred and Gold Fields has paid $4.8 million in response costs to remediate the
Site. These costs include amounts spent under the EPA’s order and supervision
and pursuant to a 2002 AOC and 2005 AOC.

These incurred costs were necessary

for the remediation of the Site and consistent with the National Contingency Plan.
III.

Summary Judgment Standard

Summary judgment is warranted 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). To survive summary judgment, a nonmovant
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must be able to show that a reasonable jury could return a verdict in his favor; if he
is unable to “establish the existence of an element essential to [her] case, and on
which he will bear the burden of proof at trial,” Celotex Corp. v. Catrett, 477 U.S.
317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), summary judgment must be
granted. A bare contention that an issue of fact exists is insufficient to create a
factual dispute, but the court must construe all facts in a light most favorable to the
nonmoving party, view all reasonable inferences in that party's favor, see Bellaver

v. Quanex Corp., 200 F.3d 485, 491–92 (7th Cir. 2000), and avoid “the temptation
to decide which party's version of the facts is more likely true,” Payne v.

Pauley, 337 F.3d 767, 770 (7th Cir. 2003) (noting the often stated proposition that
“summary judgment cannot be used to resolve swearing contests between
litigants”). A material fact must be outcome determinative under the governing
law. Insolia v. Philip Morris Inc., 216 F.3d 596, 598–99 (7th Cir. 2000).
“Irrelevant or unnecessary facts do not deter summary judgment, even when in
dispute.” Harney v. Speedway SuperAmerica, LLC, 526 F.3d 1099, 1104 (7th Cir.
2008).
IV.

Analysis

Blue Tee and Gold Fields filed the motion for summary judgment as to XTRA
Intermodal and X-L’s contribution liability for Blue Tee and Gold Fields’ past
present and future costs to remediate the Site. Specifically, Blue Tee and Gold
Fields are only seeking a finding as to CERCLA contribution liability, with the
allocation of damages to be determined at a later proceeding. Plaintiffs argue that
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the prima facie case of contribution is satisfied.

In response, defendants

acknowledge that XTRA Intermodal is the current owner and that X-L-Co. is the
former owner that spread limited amounts of slag at the Site to use as fill material.
Further, defendants acknowledge that they meet the definition of a potentially
responsible party under CERCLA. Despite this concession, defendants maintain
that that they are entitled to a zero allocation as they did not generate any new
contamination on the Site; rather defendants’ mere movement of a limited amount
of preexisting slag within the Site did not increase plaintiffs’ response costs.
Based on the following, the Court finds genuine issues of material fact exist and
denies summary judgment.
CERCLA was passed in 1980 “to promote the ‘timely cleanup of hazardous
waste sites’ and to ensure that the costs of such cleanup efforts were borne by those
responsible for the contamination.”

Burlington Northern & Santa Fe Ry. Co., v.

United States, 556 U.S. 599, 602, 129 S.Ct. 1870 (2009)(internal citations
omitted).

There are four classes of potentially responsible parties upon whom

CERCLA imposes liability: (1) present owners and operators of facilities; (2) past
owners or operators of the facility at the time of the disposal of a hazardous
substance; (3) arrangers of the disposal of hazardous substances at the facility; and
(4) certain transporters of hazardous substances.

42 U.S.C. § 9607(a).

“CERCLA imposes a ‘pay first, split-the-bill-later’ regime, [and] … [a]nyone who
paid [for cleanup] can then recover contribution from other responsible parties in
accordance with that entity’s equitable share of the costs.”
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NCR Corp. v. George A.

Whiting Paper Co., 768 F.3d 682, 686 (7th Cir. 2014).
Contribution is a two-step analysis. The first step is determining whether
defendants are entities responsible under 42 U.S.C. § 9607; the second step is
determining

how

to

allocate

the

costs

among

the

responsible

parties.

Environmental Transportation Systems, Inc., v. ENSCO, Inc., 969 F.2d 503, 506
(7the Cir. 1992).

As to the first step, the record reflects that defendants do meet

the definition of potentially responsible parties. However, this finding alone does
not equate to a finding of liability for contribution. Thus, the question the Court
must address is the proper allocation among the parties.
Under § 9613(f), “the court may allocate response costs among liable parties
using such equitable factors as the court determines are appropriate.”
have often relied on six factors. Id. at 508.

Courts

These factors are: (1) the ability of the

parties to demonstrate that their contribution to a discharge, release or disposal of
a hazardous waste can be distinguished; (2) the amount of hazardous waste
involved; (3) the degree of toxicity of the hazardous waste involved; (4) the degree of
involvement by the parties in the generation, transportation, treatment, storage or
disposal of the hazardous waste; (5) the degree of care exercised by the parties with
respect to the hazardous waste concerned, taking into account the characteristics
of such hazardous waste; and (6) the degree of cooperation to prevent any harm to
the public health or the environment. Kerr-McGee Chemical Corp. v. Lefton Iron

& Metal Co., 14 F.3d 321, 326 n. 4 (7th Cir. 1994). The court should consider any
other factors that are relevant and appropriate.
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Id. at 326.

Primarily, the Court finds that there exists a question of material fact as to
whether defendants spreading of slag across the Site actually caused plaintiffs’
additional damage.

Defendants maintain that their actions caused none of

plaintiffs’ response costs; while plaintiffs maintain that X-L’s grading and
distribution of the slag for the use as grade and fill caused them response costs
under CERCLA.

Further, there is conflicting expert testimony regarding this

issue. Defendants, through their experts, maintain that the limited spreading of
slag by X-L did not increase response costs and plaintiffs maintain that it did.
Summary judgment is not appropriate because plaintiffs have failed to show that
no issue of material fact exists and that they are entitled to summary judgment.
V.

Conclusion

Accordingly, the Court DENIES plaintiffs’ Blue Tee Corp.’s and Gold Fields
Mining, LLC’s motion for summary judgment on contribution liability against
defendants X-L-CO., Inc. and XTRA Intermodal, Inc. (Doc. 127).

The Court SETS

this matter for final pretrial conference on February 18, 2016 at 1:30 p.m.
IT IS SO ORDERED.
Signed this 7th day of December, 2015.

Digitally signed by
Judge David R.
Herndon
Date: 2015.12.07
15:12:53 -06'00'

United States District Court

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