Rolan et al v. Atlantic Richfield Company et al
Filing
155
OPINION AND ORDER GRANTING 136 MOTION for Summary Judgment filed by Atlantic Richfield Company, Pursuant to Federal Rule of Civil Procedure 56. Signed by Judge Holly A Brady on 10/22/19. (kjp)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
LERITHEA ROLAN, and LAMOTTCA
BROOKS, Individually, and on behalf of
all others similarly situated,
Plaintiffs,
v.
CAUSE NO.: 1:16-cv-357-HAB-SLC
ATLANTIC RICHFIELD COMPANY,
E.I. DU PONT DE NEMOURS AND
COMPANY, and THE CHEMOURS
COMPANY,
Defendants.
OPINION AND ORDER
This matter is before the Court on Defendant Atlantic Richfield Company’s Motion
for Summary Judgment Pursuant to Federal Rule of Civil Procedure 56 [ECF No. 136].
Plaintiffs Lerithea Rolan and Lamottca Brooks were residents of East Chicago, Indiana,
living in the West Calumet Public Housing Complex (the “West Calumet Housing
Complex”) in 2016 when the Environmental Protection Agency (the “EPA”) warned them
of dangerous levels of lead and arsenic in the soil where they lived. Plaintiffs’ sole
remaining claim against Atlantic Richfield is for cost recovery under CERCLA
[Comprehensive Environmental Response, Compensation, and Liability Act]. Plaintiffs
seek two categories of CERCLA costs: (1) investigative costs; and (2) temporary relocation
costs. Atlantic Richfield contends that they cannot recover either as a matter of law.
Plaintiff filed their Memorandum in Response to Defendant Atlantic Richfield
Company’s Motion for Summary Judgment [ECF No. 146] asserting that both the
investigative and temporary relocation costs are recoverable and that genuine issues of
material fact preclude summary judgment. Defendant filed a Reply [ECF No. 150].
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). The non-moving party must marshal and present the Court
with evidence on which a reasonable jury could rely to find in their favor. Goodman v.
Nat’l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010). A court must deny a motion for
summary judgment when the nonmoving party presents admissible evidence that creates
a genuine issue of material fact. Luster v. Ill. Dep’t of Corrs., 652 F.3d 726, 731 (7th Cir. 2011)
(citations omitted). A court’s role in deciding a motion for summary judgment “is not to
sift through the evidence, pondering the nuances and inconsistencies, and decide whom
to believe. The court has one task and one task only: to decide, based on the evidence of
record, whether there is any material dispute of fact that requires a trial.” Waldridge v.
Am. Heochst Corp., 24 F.3d 918, 920 (7th Cir. 1994).
Facts that are outcome determinative under the applicable law are material for
summary judgment purposes. Smith ex rel. Smith v. Severn, 129 F.3d 419, 427 (7th Cir.
1997). Although a bare contention that an issue of material fact exists is insufficient to
create a factual dispute, a court must construe all facts in a light most favorable to the
nonmoving party, view all reasonable inferences in that party’s favor, Bellaver v. Quanex
2
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). Additionally, a court is not “obliged to research and construct legal arguments for
parties, especially when they are represented by counsel.” Nelson v. Napolitano, 657 F.3d
586, 590 (7th Cir. 2011).
STATEMENT OF FACTS
Plaintiffs formerly resided in the West Calumet Housing Complex located in East
Chicago, Indiana. The West Calumet Housing Complex was located in what became
designated as the USS Lead Superfund Site (the “Site”). The Site became the subject of a
Consent Decree approved by a federal district court in 2014 that resolved CERCLA claims
brought by the United States and the State of Indiana with respect to the Site. See United
States v. Atlantic Richfield Co., et al., No. 2:14-CV-312-PPS-PRC (N.D. Ind. Oct. 28, 2014).
The West Calumet Housing Complex was designated as “Zone 1” of Operable
Unit One (“OU1”) within the larger USS Lead Superfund Site. The housing complex had
been built on the former Anaconda Copper Company site, Atlantic Richfield’s alleged
predecessors-in-interest. Adjacent to OU1 is Operable Unit Two (“OU2”), which marks
the location of the former USS Lead facility.
A.
The EPA Investigation
The EPA conducted initial testing in OU1 in 2007. In April 2009 the Site was listed
on the National Priorities List (“NPL”) after the EPA tested the contamination
concentration levels at the USS Lead facility and OU1. This NPL designation rendered
the Site eligible for CERLA-financed remedial action.
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In June 2009, the EPA began a series of investigations and studies at the site of the
West Calumet Housing Complex. EPA performed a Remedial Investigation of OU1 to
“assess site conditions and collect data for the purpose of developing and evaluating
effective remedial alternatives,” which involved collecting and analyzing soil samples.
(Ballotti Decl. ¶ 14(b), ECF No. 138-5.) The EPA also conducted a “baseline Human Health
and Risk Assessment . . . to identify the current and potential threats to human health
from the contaminants in the soil at OU1.” (Id. ¶ 14(e)). In addition, the EPA performed
a Feasibility Study “to develop and evaluate a range of remedial alternatives,” each of
which was evaluated in light of various criteria including “protectiveness of human
health and the environment.” (Id. ¶ 14(f)).
B.
The EPA’s Remediation Plan
In June 2012, the EPA issued final reports on its Remedial Investigation and
Feasibility Study. In early July 2012, the EPA issued and published its proposed
remediation plan for OU1 and solicited public comment. The EPA, choosing from a
variety of remedial alternatives, proposed a plan that would reduce exposure of residents
to contaminated soils that posed a health risk, specifically through the removal and offsite disposal of the soils, while allowing for the continued residential use of impacted
properties within OU1.
The initial thirty-day period for public comment ran from July 12 through August
11, 2012. At the request of the City of East Chicago, the EPA extended the public comment
period until September 10, 2012.
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Following the close of the public comment period and consideration of the
comments received, in November 2012, the EPA issued its Record of Decision
establishing its remediation plan for OU1. The Selected Remedy required several steps.
Soil that contained lead or arsenic in concentrations that exceeded the remedial action
levels (400 ppm for lead and 26 ppm for arsenic) would be excavated to a maximum depth
of 24 inches below ground surface (“bgs”) and disposed of at a CERCLA-approved
landfill. Clean soil would be placed in the excavated area to the original grade; if
contaminated soil existed at depths greater than 24 inches bgs, a visual barrier would be
placed above the contaminated soil before backfilling with clean soil. Further,
institutional controls would be used for properties where contamination remained below
the 24 inches bgs.
The Record of Decision stated that “[t]he expected outcome of the Selected
Remedy is that residents in OU1 will no longer be exposed to soil that poses a threat to
human health. The land use of the properties will remain unchanged, and the Selected
Remedy will allow for the continued residential use of impacted yards.” (ROD 49, ECF
No. 138-3.)
C.
Communication of Soil Testing Results and EPA Response
At the end of 2014 and pursuant to its remediation plan, the EPA collected soil
samples from the properties of the West Calumet Housing Complex residents and tested
those samples for lead and arsenic. In early June 2016, the EPA began mailing letters to
the residents of the West Calumet Housing Complex to notify them of the test results.
The letters, including one dated July 8, 2016, to Plaintiff Rolan, advised residents that the
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sampling results “show that lead and/or arsenic concentrations in soils at [the] property
exceed health-based standards, and therefore [the] property qualifies for a cleanup of
those soils which pose a risk.” (ECF No. 1-5 at 5.) The letters advised that the cleanup of
soils would be conducted at “NO COST” to the residents. (Id.)
The EPA explained that the cleanup would involve five steps: (1) a “[p]re-cleanup
interview” with the resident, including documenting existing conditions of the property;
(2) excavation of contaminated soils; (3) backfilling with clean soils; (4) restoration of
landscaping and grass; and (5) a “[p]ost-construction interview” with the resident. (ECF
No. 1-5 at 6.) The letter advised parents to prevent children from playing in dirt, to wash
their children’s toys regularly and to wash their children’s hands after they played
outside. All residents were advised to remove shoes before walking into their homes. It
was recommended that residents not dig or garden in their yards. The EPA and staff from
the Agency for Toxic Substances and Disease Registry also went door-to-door to
residents’ homes to provide them with additional information concerning the cleanup
and how to reduce exposure to lead contamination.
The EPA took additional measures to reduce exposure. Exposure to lead in
contaminated soil only occurs if there is direct contact with the soil. Therefore, grass and
mulch serve as a barrier to the chain of contact. The EPA identified any areas with no or
poor grass cover and placed triple shredded hardwood mulch on those areas. The EPA
also worked with parties responsible for maintenance to alter mowing practices to reduce
or eliminate the disturbance of dirt and mulch.
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D.
West Calumet Housing Complex: Resident Relocation; Demolition
In 2010, the East Chicago Housing Authority (the “ECHA”), which owned and
operated the West Calumet Housing Complex, had determined that most of the units in
the West Calumet Housing Complex had reached the end of their useful life and would
be too costly to repair. In a five-year plan, dated October 15, 2014, the ECHA identified
the 346-unit West Calumet Housing Complex for demolition or sale. In July 2016, in light
of the EPA’s findings, the ECHA expedited its application to the U.S. Department of
Housing and Urban Development to begin removing residents from the West Calumet
Housing Complex.
The EPA had provided the results of the soil tests to the City of East Chicago and
the ECHA on May 26, 2016. On about July 24, 2016, the Mayor of East Chicago sent his
own letter to the residents of the West Calumet Housing Complex. He acknowledged
that the City and the ECHA had recently been informed of the results of the EPA’s soil
testing. He advised that it was in the best interest of the residents to “temporarily relocate
[their] household[s] to safer conditions.” (ECF No. 1-5 at 19.) The letter stated that the
ECHA would be assisting residents in the coming days and would continue to provide
information.
The ECHA also informed West Calumet residents that soil testing had revealed
high levels of contaminants. At the end of July, the ECHA issued a public notice stating
that it desired to demolish the 346 units located at the West Calumet Housing Complex.
A public hearing was scheduled for August 3, 2016. At the August 3 public meeting, the
West Calumet Housing Complex residents “were formally informed through a public
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hearing of the decision to expedite” permanent relocation of all residents of the West
Calumet Housing Complex. (ECF No. 140-6 at 4.) The ECHA advised residents that they
would have to move. The West Calumet Housing Complex was projected to be 100%
vacant by April 2017. (Id. at 5.)
By August 5, 2016, the U.S. Department of Housing and Urban Development
(“HUD”) approved $1.9 million for tenant protection vouchers for new housing. The
vouchers would allow residents to permanently relocate anywhere in the United States.
By March 1, 2017, three-quarters of the West Calumet Housing Complex residents had
relocated or were in the process of relocating. In September 2017, HUD approved ECHA’s
application to demolish the West Calumet Housing Complex. Demolition began in April
2018 and is now complete. https://www.epa.gov/uss-lead-superfund-site/westcalumet-housing-complex-east-chicago-ind (last visited 9/26/19).
The EPA put its plan for soil excavation and restoration on hold during the
permanent relocation efforts and pending demolition request. The EPA has proposed an
amendment to the cleanup plan and conducted a feasibility study to evaluate cleanup
options based on the City of East Chicago’s stated intention to zone the parcel for
residential use. (Id.)
E.
Interior Cleaning
In early August 2016, the EPA, realizing that interiors of homes might also be
contaminated with lead and that permanent relocation would take time to complete,
offered to clean the interior of occupied West Calumet Housing Complex units if the head
of the household agreed to it. In connection with the offer, the EPA issued a “Residents’
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Guide to Temporary Relocation” for the West Calumet Housing Complex. The Guide
explained that the EPA was offering to clean all homes in the West Calumet Housing
Complex and that residents who wanted the EPA to clean their homes were “being asked
to relocate temporarily while the cleaning is being done.” (ECF No. 139-2 at 6.) The Guide
stated that the EPA had “made arrangements with several hotels and motels which are
being used as temporary housing for families during the cleaning of their homes” and
that the EPA’s “Relocation Team will work with [the residents] to find a suitable location
for you and your family.” (Id. at 12.) The EPA informed residents that the EPA will pay
the housing costs related to residents’ temporary relocation during the cleanup, including
moving services and drivers available to take children to and from school. Residents were
told to expect that they would be away from their homes for five to seven days. The EPA
advised that residents’ dishes, cookware, towels, clothes, and bedding were still safe to
use.
The EPA also informed residents of the types of expenses that would not be
eligible for reimbursement. Although residents could choose to secure their own
temporary housing—rather than staying at the hotels that the EPA arranged—they had
to obtain the EPA’s approval before making arrangements to rent or sublease housing.
F.
Plaintiffs’ Residences
The EPA cleaned Plaintiff Rolan’s and Plaintiff Brooks’s homes in 2016. While
Brooks’s home was being cleaned, the EPA paid for her to say in a hotel and provided
her with money for food. Once her residence was cleaned, Brooks was permitted to return
to her residence. Brooks did not return to her residence because she had decided to move
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permanently after receiving the Mayor’s letter. She incurred expenses as she sought
permanent housing, including for hotel rooms for herself and her children, transportation
between the hotel and school, and childcare expenses.
The EPA cleaned Rolan’s residence in September 2016. During the cleaning, Ms.
Rolan stayed in a hotel room paid for by the EPA. The EPA also paid for most of Rolan’s
meals during her temporary relocation. Between July and October 2016, Rolan also stayed
at her mother’s house or her cousin’s home, only staying at the West Calumet Housing
Complex two or three days per week. Rolan also incurred gas and mileage expenses.
G.
Investigation Costs
In October 2016, one of Plaintiffs’ attorneys engaged and paid Edward E. Garske
of Carlson Environmental Consultants (“Carlson”) for a preliminary opinion as to what
the West Calumet Housing Complex residents should do in response to the lead and
arsenic in the soil.
ANALYSIS
CERCLA authorizes the EPA to act, consistent with the National Contingency Plan
(“NCP”), to remove or arrange for the removal of hazardous substances, pollutants, or
contaminants necessary for protection of the public health or welfare or the environment.
42 U.S.C. § 9604(a)(1). These provisions give the EPA broad powers “to select appropriate
remedial actions determined to be necessary to be carried out” under the statute. Id.
§ 9621(a); United States v. Bestfoods, 524 U.S. 51, 55 (1998). The NCP is “designed to
promote cost-effective measures to protect public health and the environment.” Union
Pac. R.R. Co. v. Reilly Indus., Inc., 215 F.3d 830, 835 (8th Cir. 2000).
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CERCLA § 107 provides, in pertinent part, that a responsible party is liable for “all
costs of removal or remedial action incurred by the United States Government or a State
or an Indian tribe not inconsistent with the national contingency plan.” 42 U.S.C. §
9607(a)(4)(A). Section 107(a) also creates a private right of action to recover “necessary
costs of response incurred by any other person consistent with the [NCP].” 42 U.S.C. §
9607(a)(4)(B). A prima facie case for CERCLA cost recovery requires a plaintiff to prove:
“(1) the site in question is a ‘facility’ as defined by CERCLA; (2) the defendant is a
responsible party; (3) there has been a release or there is a threatened release of hazardous
substances; and (4) the plaintiff has incurred costs in response to the release or threatened
release.” Sycamore Indus. Park Assocs. v. Ericsson, Inc., 546 F.3d 847, 850 (7th Cir. 2008).
A nongovernmental plaintiff is additionally required to “show that any costs
incurred in responding to the release were ‘necessary’ and ‘consistent with the national
contingency plan.’” Valbruna Slater Steel Corp. v. Joslyn Mfg. Co., No. 1:10-CV-44, 2015 WL
8055999, at *3 (N.D. Ind. Dec. 4, 2015) (quoting Forest Park Nat’l Bank & Tr. v. Ditchfield,
881 F. Supp. 2d 949, 977 (N.D. Ill. 2012)); see also City of Colton v. Am. Promotional Events,
Inc.-W., 614 F.3d 998, 1003 (9th Cir. 2010) (citing as third element of prima facie claim for
recovery of response costs by a private-party plaintiff that the response costs were
necessary and consistent with the NCP). In the words of the Tenth Circuit, “Section 107
provides that a person is only liable for private party response costs to the extent that
these costs were incurred ‘consistent with the national contingency plan.’ Proof of
response costs incurred ‘consistent with’ the NCP is, therefore, an element of the prima
facie private cost recovery action under CERCLA.” Cty. Line Inv. Co. v. Tinney, 933 F.2d
11
1508, 1512 (10th Cir. 1991) (quoting 42 U.S.C. § 9607(a)(4)(B)); see also NutraSweet Co. v. XL Eng'g Co., 227 F.3d 776, 791 (7th Cir. 2000) (citing approvingly to the statement from
County Line regarding elements of a prima facie response cost claim).
A.
Costs of Investigation
Plaintiffs allege that they are entitled to recover from Defendant the preliminary
costs of investigation they incurred when they hired Carlson. Defendant disagrees and
submits that it is entitled to judgment as a matter of law with respect to these costs
because the evidence shows that Plaintiffs did not personally incur the investigation costs
that were paid by legal counsel. Second, even if they had incurred the fees, they were
duplicative of the EPA’s work, did not further the investigation or remediation of the Site,
and were only incurred in connection with the instant litigation.
1.
Requirement that Costs be Incurred
The CERCLA recovery statute requires that a cost be “incurred.” 42 U.S.C. §
9607(a)(4)(B). “[T]he mere possibility, even the certainty, that an obligation to pay will
arise in the future does not establish that a cost has been incurred, but rather establishes
that a cost may be incurred, or will be incurred” for purposes of CERLA. Trimble v. Asarco,
Inc., 232 F.3d 946, 958 (8th Cir. 2000), abrogated on other grounds by Exxon Mobil Corp. v.
Allapattah Servs., Inc., 545 U.S. 546 (2005). In Trimble, the court affirmed the dismissal of a
CERCLA cost recovery claim because the plaintiffs did not “incur” the response costs that
were paid by plaintiffs’ attorneys on a contingency basis. An obligation to reimburse
counsel would not arise unless and until plaintiffs were successful in obtaining a final
judgment, and then only to the extent of that judgment. 232 F.3d at 956–57. The court
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distinguished the potential future obligation from an existing legal obligation. Id. at 957–
58.
Here, it is not disputed that counsel paid the fees to retain Carlson. Nor is there
any dispute that counsel is representing Plaintiffs on a contingency basis in this litigation.
Plaintiffs contend that this does not matter, as they are still responsible to pay the $500
fee, at least as far as they understand what might be required of them. (Brooks Dep. 5657, ECF No. 138-1 (testifying that there was no written agreement with respect to paying
the environmental consultant but expecting that she still owes money for the cost of the
consultant); Rolan Dep. 66–67, ECF No. 138-2 (stating that she would rely on her attorney
to determine when she would be required to pay the environmental consultant’s fee, but
that it would not depend on whether the suit was successful).)
The Court has reviewed Plaintiffs’ testimony and finds that they did not establish
that they had a basis for their personal knowledge regarding the obligation to reimburse
counsel for the Carlson fees. They did not cite any concrete grounds for the
understanding, except perhaps their Retainer Agreement with counsel. In the summary
judgment briefing before this Court, both parties have proceeded under the assumption
that the Retainer Agreement is the controlling document with respect to Plaintiffs’ legal
obligation to pay Carlson’s fees. The Court will do the same.
The relevant portion of the Retainer Agreement provides,
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(Rolan Retainer ¶ 4, ECF No. 138-9.) Thus, to the extent Plaintiffs testified that they would
rely on their counsel, or that they understood they were responsible to pay the $500, they
were, in a sense, correct. However, any testimony that they will, with certainty, be
required to the pay the costs lacks evidentiary support. There is no evidence in the record
that counsel has triggered the obligation by requesting reimbursement.
It is not even clear from the language of the Agreement whether they could make
any such demand; paragraph 2, which precedes the paragraph at issue, states that
“[t]here will be no charge for services in the prosecution of my said claims unless a
recovery is made.” (Id. ¶ 2 (emphasis added). The Agreement then addresses Attorneys’
fees (Id. ¶ 3), followed by expenses incurred “in connection with their performance of
services” (Id. ¶ 4 (emphasis added)). In any event, at this point, counsel—not Plaintiffs—
has assumed the legal obligation to pay Carlson.
Speculation and subjective beliefs cannot create genuine issue of fact where the
written document does not show that Plaintiffs have an existing legal obligation to
reimburse counsel for the consultant’s fees. As a matter of law, Plaintiffs have not
“incurred” the costs of the investigation. Summary judgment in favor of Defendant is
appropriate.
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2.
Requirement that the Costs be Necessary
Defendant argues that, regardless of whether Plaintiffs have incurred the
investigation fee, Carlson’s work was duplicative of the EPA’s investigation and was
conducted in preparation for litigation. As such, it is not recoverable. Plaintiffs’ position
is that Carlson was retained to review documents to provide advice as to whether they
should leave the area of contamination, and this is a recoverable “removal” cost.
In October 2016, counsel for Plaintiffs talked to Edward Garske of Carlson and
requested that he look at some documents and provide an opinion whether the residents
should leave the area. Garske agreed that the charge would be no more than $500. Garske
testified, however, that he began his review of the documents in February 2017 because
that is when he received the documents. (Garske Dep. 13, ECF No. 138-10.) He may have
also provided an opinion prior to that. (Garske Dep. 44, ECF No. 151-1.) The documents
Garske reviewed consisted of EPA reports and correspondence related to the EPA’s
investigation and remediation of the site, correspondence from Mayor Copeland and the
ECHA, and a news article discussing this Court’s decision on Defendants’ motions to
dismiss. (Garske Dep. 24; Ex. 11, Garske Dep. Exs. 4-12 (documents reviewed by Garske),
ECF No. 138-11.) Garske had a follow-up conversation with counsel to report his findings.
Although the extent of Carlson’s opinion and the timeline is not without some
ambiguity, the following facts are not in dispute and provide relevant context. In July
2012, the EPA issued a proposed remediation plan that required remediation of the soil
in the yards at the West Calumet Housing Complex. In July 2016, the results of soil sample
testing of the West Calumet Housing Complex properties were communicated to
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residents, along with the remediation plan for the yards and tips for reducing exposure
to contaminants in the soil. The Mayor of East Chicago sent a letter telling residents that
it was in their best interest to temporarily relocate. In response to the Mayor’s letter, Rolan
made the decision to permanently leave the West Calumet Housing Complex and began
staying with people she knew outside of East Chicago. Rolan confirmed her decision after
speaking with her lawyer in August or September 2016. (Rolan Dep. 57, 62–63). Brooks
also started looking for housing outside of the West Calumet Housing Complex after she
received the Mayor’s letter. (Brooks Dep. 112.)
During this same period, the ECHA advised that it would be seeking authority
from HUD to demolish the West Calumet Housing Complex and residents would
eventually be required to relocate permanently. Soon thereafter, the EPA communicated
an offer to clean the inside of residences for those who requested. Sometime between July
and October 2016, the EPA cleaned Brooks’s residence. Rolan’s residence was cleaned in
September 2016.
Rolan’s Retainer Agreement is dated September 10, 2016. (ECF No. 138-9.) In
October 2016, Plaintiffs’ counsel hired Carlson. On October 6, 2016, Plaintiffs filed their
federal lawsuit.
Plaintiffs assert that their retention of Carlson was a “response” that qualifies as a
“removal.” The statute defines “response” as “remove, removal, remedy, and remedial
action,” along with related enforcement activities. 42 U.S.C. § 9601(25). “The terms
‘remove’ or ‘removal’ mean the cleanup or removal of released hazardous substances
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from the environment,” 42 U.S.C. § 9601(23). The statutory provision, in full, defines
“remove” or “removal” to include:
the cleanup or removal of released hazardous substances from the
environment, such actions as may be necessary taken in the event of the
threat of release of hazardous substances into the environment, such actions
as may be necessary to monitor, assess, and evaluate the release or threat of
release of hazardous substances, the disposal of removed material, or the
taking of such other actions as may be necessary to prevent, minimize, or
mitigate damage to the public health or welfare or to the environment,
which may otherwise result from a release or threat of release.
42 U.S.C. § 9601(23). The only portion of this definition that could apply to Carlson’s
involvement is “actions as may be necessary to monitor, assess, and evaluate the release
. . . of hazardous substances.” However, Plaintiffs have not presented evidence that
would permit the conclusion that Carlson monitored, assessed, or evaluated the release
of hazardous substances. The EPA had already performed a remedial investigation,
performed a feasibility study, issued a proposed plan for remediation, and issued a
record of decision. It had also communicated with residents, letting them know the
ground would be remediated, and, later, offering to clean the interiors of their homes.
In short, the evidence before the Court does not support a conclusion that the $500
paid to Carlson to review documents and advise whether the residents of the West
Calumet Housing Complex should leave their homes was “necessary to address” a threat
to human health. G.J. Leasing Co. v. Union Elec. Co., 854 F. Supp. 539, 562 (S.D. Ill. 1994).
“Generally, ‘investigative costs incurred by a private party after the EPA has initiated a
remedial investigation, unless authorized by the EPA’ are not considered necessary
because they are ‘duplicative’ of the work performed by EPA.” United States v. Iron
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Mountain Mines, Inc., 987 F. Supp. 1263, 1272 (E.D. Cal. 1997) (first citing La.–Pac. Corp. v.
Beazer Materials & Servs., Inc., 811 F. Supp. 1421, 1425 (E.D. Cal. 1993); then citing United
States v. Hardage, 750 F. Supp. 1460, 1511–17 (W.D. Okla. 1990), aff’d 982 F.2d 1436, 1447–
48 (10th Cir. 1992)). Whether Plaintiffs were reasonable in their conduct, or acted in good
faith, is not relevant to the inquiry. La.-Pac., 811 F. Supp. at 1425. Accordingly, Plaintiffs’
claims of subjective confusion about what to do in response to mixed messages from
governmental entities, particularly the letter from the Mayor of East Chicago, is beside
the point. The Court would, however, additionally note that neither Plaintiff appeared to
have made the decision to permanently relocate from East Chicago as a result of the
services from Carlson.
An additional barrier to recovery is its potential connection to the litigation as
opposed to the contamination. “CERCLA’s remedial scheme similarly does not include
reimbursement for expenses incurred solely in preparation for litigation unless they
significantly benefited the entire cleanup effort and served a statutory purpose apart from
the reallocation of costs.” Wilson Rd. Dev. Corp. v. Fronabarger Concreters, Inc., 209 F. Supp.
3d 1093, 1111 (E.D. Mo. 2016) (first quoting Gussack Realty Co. v. Xerox Corp., 224 F.3d 85,
91–92 (2d Cir. 2000); then quoting Key Tronic Corp. v. United States, 511 U.S. 809, 820 (1960))
(quotation marks and bracket omitted). For example, in Syms v. Olin Corp., 408 F.3d 95,
104 (2d Cir. 2005), the court found that costs associated with counsel’s efforts reviewing
historical documents, analyzing boxes of data related to contamination, attempting to
identify other potential responsible parties, commenting on work plans, and facilitating
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site access were not recoverable because they were duplicative and did not significantly
benefit the overall clean-up effort.
Plaintiffs challenge the allegation that the advice they sought from Carlson was a
litigation-related expense without providing evidence that disputes the timeline that
appears to connect the retention of Carlson to their litigation rather than to their decision
to leave East Chicago.1 In any event, the Court finds that it would make no difference to
the outcome. The Court understands Plaintiffs to assert that “Carlson’s work was far
different from mere oversight or duplication of EPA’s work” like that performed in the
cases cited above. (Pls.’ Mem. 11.) However, Plaintiffs have not cited to a single authority
that would permit recovery of costs incurred for the purpose of obtaining an opinion
whether a resident should discontinue residing at a site where the EPA has established
plans to remediate, much less when the opinion is based solely on review of documents
like those Carlson reviewed here. The Court finds that Plaintiffs have not designated
evidence from which a finder of fact could conclude that they are entitled to recoup
Carlson’s fees through a CERCLA recovery action.
B.
Relocation Costs
Plaintiffs seek recovery of costs associated with their temporary relocation efforts
on grounds that the situation in East Chicago revealed that Plaintiffs had reason to
relocate even after the EPA cleaned the interior surfaces of their homes. They submit that,
Indeed, counsel’s asserted ability to recover the fee as an out-of-pocket expense incurred in
connection with their performance of services under the Retainer Agreement implies that it was
an expense incurred in connection with the litigation.
1
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in seeking temporary housing, they prevented, minimized, and mitigated danger to
themselves and their children. Defendant asserts that the EPA selected a plan that
specifically did not require West Calumet Housing Authority residents to relocate, except
for the time it took to clean the interior of the residences. According to Defendant, not
only were the costs unnecessary, but they were not compliant with the NCP.
Response costs are those “costs of investigating and remedying the effects of a
release or threatened release of a hazardous substance into the environment.” Young v.
United States, 394 F.3d 858, 863 (10th Cir. 2005). These costs “are ‘necessary’ if they are
incurred in response to a threat to human health or the environment and they are
necessary to address that threat.” Valbruna Slater Steel Corp., 2015 WL 8055999, at *4 (citing
G.J. Leasing Co. v. Union Elec. Co., 854 F. Supp. 539, 562 (S.D. Ill. 1994)); see also Wilson Rd.
Dev. Corp. v. Fronabarger Concreters, Inc., 209 F. Supp. 3d 1093, 1113 (E.D. Mo. 2016)
(“[B]ecause CERCLA’s remedial scheme is aimed at promoting expedient cleanup of
hazardous substances, a private party’s actions must be ‘closely tied to’ an ‘actual
cleanup’ to be necessary.”).
The Court finds that, as a matter of law, Plaintiffs’ expenses for temporary housing
and related expenses, incurred because they decided to limit their time at the West
Calumet Housing Complex, is an economic loss for which CERCLA was not intended to
provide a remedy. “Superfund money [is not] available to compensate private parties for
economic harms that result from discharges of hazardous substances.” Exxon Corp. v.
Hunt, 475 U.S. 355, 359–60 (1986); see also Daigle v. Shell Oil Co., 972 F.2d 1527, 1535 (10th
Cir. 1992) (reviewing legislative history of statute and concluding that “both houses of
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Congress considered and rejected any provision for recovery of private damages
unrelated to the cleanup effort.”); G.J. Leasing Co. v. Union Elec. Co., 854 F. Supp. 539, 561
(S.D. Ill. 1994) (noting that because “Congress did not intend CERCLA to make injured
parties whole or to create a general vehicle for tort actions,” a private party must prove
affirmatively that its costs were a necessary cost of response).
CERCLA’s purpose lies not in compensating victims, but in encouraging
fast, efficient cleanup. Those private parties entitled to recover their costs
are those parties who engaged in cleanup. They are the people at whom
CERCLA directs its incentives: financial recovery of necessary costs
associated with ridding the environment of the hazards. Lacking these
incentives, Congress reasoned, private parties would not, or could not, act
toward the public good; and it is the public good with which CERCLA is
concerned. The private good requires no such incentives for pursuit.
Traditional state law remedies are available.
Holloway v. Gaylord Chem., 922 F. Supp. 1154, 1158 (E.D. La. 1996); see also Rhodes v. Cty. of
Darlington, S.C., 833 F. Supp. 1163, 1179 (D.S.C. 1992) (“Response costs are themselves
defined under the specific ambit of the Act, not under the generic calculus of the common
law.”).
Plaintiffs’ citation to the definition of removal, which includes “temporary
evacuation and housing of threatened individuals,” 42 U.S.C. § 9601(23), does not
convince the Court that their claims fall within the scope of the statute. As the
implementing regulations related to removal actions state, such costs must still be
“necessary to protect public health or welfare.” 40 C.F.R. § 300.415(f). Accordingly,
leaving a residence primarily due to fear for one’s own safety, while an understandable
response, is distinguishable from a “necessary response” taken primarily to further the
goal of prompt, efficient cleanup of a hazard. Holloway, 922 F. Supp. at 1159 (holding that
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expenses incurred because of evacuation of home were not compensable under
CERLCA). Plaintiffs criticize the Holloway court for failing to recognize the definition of
“removal,” but that court did not hold that evacuation costs were never compensable. Its
decision turned on whether the costs were “necessary,” not whether they fit within a
category of costs defined in the statute. Id.
Here, the EPA’s cleanup remedy did not require demolition. Nor did the lead
agency determine that relocation or evacuation was necessary as part of the remediation
plan. Although the property owner, ECHA, pursued demolition of the housing complex,
demolition and permanent relocation was not part of the EPA’s remediation plan. Nor
have Plaintiffs designated evidence from which it could be determined that it was
necessary for them to immediately leave their residences. Although their subjective
reasons are not the deciding factor on necessity, the primary basis Plaintiffs provide for
their decision is a letter from the Mayor of East Chicago advising that it was in their best
interest to temporarily relocate, and their fear of exposure to harmful chemicals. It is
undisputed that none of the documents or communications generated by the EPA
recommended relocation as necessary to address the lead contamination in the soil. Not
even the ECHA’s decision to demolish the housing complex ahead of a previously
determined schedule—regardless of its reasons for doing so—required Plaintiffs to find
alternative housing prior to their permanent relocation.
CERCLA “is fashioned to spend, in a cost-effective and environmentally sound
manner, the limited funds available for the exorbitant costs of a cleanup action.” Ambrogi
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v. Gould, Inc., 750 F. Supp. 1233, 1238 (M.D. Pa. 1990). Plaintiffs’ out-of-pocket relocation
costs are not a recoverable response cost.
CONCLUSION
For the reasons stated above, the Court GRANTS Defendant Atlantic Richfield
Company’s Motion for Summary Judgment Pursuant to Federal Rule of Civil Procedure
56 [ECF No. 136].
SO ORDERED on October 22, 2019.
s/ Holly A. Brady
JUDGE HOLLY A. BRADY
UNITED STATES DISTRICT COURT
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