SPS Limited Partnership, LLLP et al v. Severstal Sparrows Point, LLC et al

Filing 33

OPINION. Signed by Judge J. Frederick Motz on 7/5/11. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SPS LIMITED PARTNERSHIP, LLLP,
et al.,
Plaintiffs,

*
*
v.
*
*
SEVERSTAL SPARROWS POINT, LLC,
*
et al.,
*
Defendants.
*
*
*
******

Civil No. JFM-10-2579

OPINION
Plaintiffs SPS Limited Partnership, LLLP (“SPS LLLP”), and SPS 35, LLC (“SPS 35”)
are the owners of the Sparrows Point Shipyard located in Sparrows Point, Baltimore County,
Maryland (the “Shipyard Site”). Plaintiffs bring this action against Defendants, Severstal
Sparrows Point LLC, a/k/a Severstal North America (“Severstal”) and ArcelorMittal USA Inc.
(“ArcelorMittal”) for violations of the Resource Conservation and Recovery Act (“RCRA”), 42
U.S.C. § 6901, et seq.; the Comprehensive Environmental Response, Compensation and Liability
Act, as amended (“CERCLA”), 42 U.S.C. § 9601, et seq.; and Maryland common law. Plaintiffs
seek to recover cleanup and other response costs, to obtain contribution from the Defendants, to
obtain declaratory relief as to liability for future response costs pursuant to CERCLA, 42 U.S.C.
§ 9607(a), to require Defendants to take all actions necessary to eliminate the imminent and
substantial endangerment to health and the environment pursuant to RCRA, and to recover
damages pursuant to Maryland common law.
Now pending are ArcelorMittal’s and Severstal’s Motions to Dismiss, pursuant to Federal
Rules of Civil Procedure 12(b)(1), claiming a lack of subject matter jurisdiction, and Rule
12(b)(6), claiming that Plaintiffs have failed to state a claim against Defendants on which relief
1

can be granted. I have reviewed the papers, and no hearing is necessary. See Local Rule 105.6
(D. Md. 2010). As to Count I (CERCLA cost recovery) and Count II (CERCLA declaratory
judgment), Defendants’ Motions to Dismiss are denied. As to Count III (RCRA), Defendants’
Motions to Dismiss are granted, except that they are denied insofar as Plaintiffs state a narrow
claim for post-2003 contribution to disposal of hazardous substances migrating to the Shipyard
Site after 2006. As to Count IV (negligence), Count V (trespass), Count VI (nuisance), and
Count VII (strict liability), Defendants’ Motions to Dismiss are granted.
I.

Factual Background

The Shipyard Site was developed around 1880 and is comprised of approximately 131.5
acres of dry land, with a 13.4 acre excavated shore dry dock (the “Graving Dock”). (Compl.
¶ 17.) The Graving Dock, constructed in 1969, is flooded in order to bring ships into the dock,
and then can be pumped dry to facilitate repair, maintenance or construction work on ships. (Id.)
The Shipyard Site is adjacent to and surrounded on three sides by the Sparrows Point steel mill
(the “Steel Mill Site”), which has been in operation for over 100 years. (Id. ¶ 3.) The Shipyard
Site and Steel Mill Site were both owned by Bethlehem Steel Corporation (“BSC”) at one time.
In 1997, the Environmental Protection Agency (“EPA”) and Maryland Department of the
Environment (“MDE”) brought an action against BSC for violations of RCRA and
corresponding state law, which the parties settled by executing a Consent Decree, entered in this
Court on October 8, 1997.1 (Id. ¶¶ 19-20.) Under the Consent Decree, BSC agreed to investigate
and address certain environmental conditions at both the Shipyard Site and Steel Mill Site. (Id.
¶ 20.) BSC sold the Shipyard Site to Baltimore Marine on September 30, 1997, after the Consent
Decree was lodged in February 1997, but before the Consent Decree was entered in this Court in

1

See Maryland v. Bethlehem Steel Corp., No. JFM-97-558 (D. Md. filed Feb. 25, 2007).
2

October 1997. (Seve
erstal Mot. to Dismiss 11.) Plaintiff SPS LLLP bought the Shipyard Si on
o
f
ite
March 4, 2004, and Plaintiff SPS 35 acquire a minority ownership interest in t Shipyard Site
,
P
S
ed
y
p
the
d
on or abo June 8, 2006. (Comp ¶ 16.) Sh
out
2
pl.
hortly before SPS LLLP purchased t Shipyard Site
e
P
the
d
in 2004, it submitted an applica
d
ation to MDE to particip
E
pate in the M
Maryland Vo
oluntary Cle
eanup
Program (“VCP”), a Maryland program that allows owners of contamina
d
s
f
ated propert to
ty
remediate the contam
mination und state supe
der
ervision and receive lim
d
mited liability protection upon
y
completion of remed
diation. (See Severstal Mot. to Dismi 11.) On J
M
iss
June 15, 200 EPA appr
06,
roved
the removal of the Sh
hipyard Site from the Co
onsent Decre 2 (Compl. ¶ 21.)
ee.
When Plainti acquired the Shipya Site, the inherited an NPDES permit3 tha had
W
iffs
d
ard
ey
at
been in draft form fo a number of years. (Id ¶ 31.) The NPDES per
d
or
o
d.
rmit included a benzene limit
associate with the dewatering/t
ed
d
trim pumps at the Gravi Dock.4 (I In 2007 MDE info
a
ing
Id.)
7,
ormed
Plaintiffs that the be
s
enzene requirement in th NPDES p
he
permit shoul have been associated with
ld
n
d
the under
rdrain pump rather tha the dewat
ps,
an
tering/trim p
pumps, and a
asked Plainti to sampl for
iffs
le
benzene at the underdrain pump (Id. ¶ 32 In Januar 2009, Pla
ps.
2.)
ry
aintiffs and MDE finaliz a
zed
revised NPDES perm with a new benzen requireme at the u
N
mit
n
ne
ent
underdrain pumps to become

2

The EP likely ap
PA
pproved the removal of the Shipyar from the Consent D
f
rd
Decree becau in
use
order to be eligible for the Mar
ryland VCP program, a contamina
P
ated site gen
nerally cann be
not
under “ac
ctive enforce
ement.” See Md. Code Ann., Envir. § 7-501(g)(
A
(2)(ii). “Acti enforcem
ive
ment”
is define as “a not
ed
tice of viola
ation, order, consent ord or othe enforceme action o the
der,
er
ent
of
Department.” Id. § 7-501(b).
3

The Cl
lean Water Act establ
lished the National Po
N
ollution Dis
scharge Elim
mination Sy
ystem
(“NPDES See 33 U.S.C. § 1342. “Gene
S”).
erally speaki
ing, the NPD
DES require discharge to
es
ers
obtain pe
ermits that pl
lace limits on the type an quantity o pollutants that can be released int the
o
nd
of
s
e
to
Nation’s waters.” S. Fla. Water Mgmt. Dist v. Miccosu
t.
ukee Tribe o Indians, 5 U.S. 95, 102
of
541
(2004).
4

Dewate
ering/trim pu
umps operate to pump ou the water in the Gravi Dock tha comes from the
e
ut
ing
at
m
Patapsco River when the gate is open for a vessel to en or exit th Graving Dock. (Com ¶
n
nter
the
mpl.
31.)
3

effective on February 1, 2010. (Id. ¶ 34.) In order to comply with the new benzene requirement
in the NPDES permit, Plaintiffs have installed a wastewater treatment system designed to
remove benzene at the Graving Dock. (Id. ¶ 35.) Plaintiffs claim that the cost of installing and
operating the wastewater treatment system has amounted to more than $700,000 and is expected
to cost an additional $20,000 per month in operating and maintenance costs. (Id. ¶ 36.)
II.

Procedural Background

On September 5, 2008, Plaintiffs and Defendants entered into a Tolling Agreement,
which tolled and suspended any limitations periods set forth in any statute of limitations
applicable to any claims Plaintiffs possessed against Defendants as of August 28, 2008. (Compl.
¶ 8.) On May 11, 2010, after negotiations to resolve this dispute out of court proved
unsuccessful, Plaintiffs provided written notice of their intent (“NOI”) to bring this action, as
required by section 7002(b)(2)(A) of RCRA, 42 U.S.C. § 6972(b)(2)(A) (requiring a citizen give
notice of its intent to sue to the EPA Administrator, the State in which the violations are alleged
to have occurred, and the alleged violator ninety (90) days prior to the initiation of a civil action),
and section 310(d)(1) of CERCLA, 42 U.S.C. § 9659(d)(1) (requiring a citizen give notice of its
intent to sue to the President, the State in which the violations are alleged to have occurred, and
the alleged violator sixty (60) days prior to the initiation of a civil action). (Id. ¶ 9.) Plaintiffs
filed this action on September 17, 2010, more than 90 days after the NOIs were given. (Id. ¶ 9.)
Defendant ArcelorMittal filed its Motion to Dismiss on November 29, 2010, Defendant Severstal
filed its Motion to Dismiss on December 3, 2010. Plaintiffs’ opposition and Defendants’ replies
were filed in a timely manner.
III.

Statutory Background

4

RCRA is a comprehensive environmental statute that governs the treatment, storage, and
disposal of solid and hazardous waste. See Chicago v. Envtl. Def. Fund, 511 U.S. 328, 331-32
(1994). RCRA’s primary purpose is to “reduce the generation of hazardous waste and to ensure
the proper treatment, storage, and disposal of that waste which is nonetheless generated. . . .”
Meghrig v. KFC W., Inc., 516 U.S. 479, 483 (1996). Citizens are permitted to bring private suits
under RCRA in certain circumstances, but the “chief responsibility for the implementation and
enforcement of RCRA rests with the Administrator of the Environmental Protection Agency.” Id.
at 483-84 (citing 42 U.S.C. § 6902(b)). Section 3006 of RCRA, 42 U.S.C. § 6926, allows the
states to develop hazardous waste programs at least as stringent as RCRA, subject to
authorization by the Administrator of the EPA. After receiving authorization, the state may
implement its hazardous waste program “in lieu of the Federal program.” 42 U.S.C. § 6926(b).
Maryland has received final authorization for its hazardous waste program. See 50 Fed. Reg.
3511 (Jan. 25, 1985) (as revised by 69 Fed. Reg. 44463 (July 26, 2004)).
Congress enacted CERCLA “in response to the serious environmental and health risks
posed by industrial pollution. The Act was designed 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 N. & Santa Fe Ry. v. United States, 129 S. Ct. 1870, 1874
(2009) (internal quotations and citations omitted). By permitting private individuals to recover
specified costs of cleanup from those parties responsible for environmental hazards, CERCLA
encourages private individuals to remediate those hazards. Westfarm Assocs. Ltd. P’shp. v.
Washington Suburban Sanitary Comm’n, 66 F.3d 669, 677 (4th Cir. 1995). CERCLA was passed
several years after RCRA went into effect, and CERCLA addresses many of the same toxic
waste problems as RCRA. “CERCLA differs markedly from RCRA, however, in the remedies it

5

provides.” Meghrig, 516 U.S. at 485. CERCLA’s citizen suit provision mirrors RCRA’s citizen
suit provision in providing district courts with the authority “to order such action as may be
necessary to correct the violation” of any CERCLA standard or regulation. 42 U.S.C. § 9659(c).
CERCLA is distinct from RCRA, however, in that it expressly permits the Government to
recover “all costs of removal or remedial action,” § 9607(a)(4)(A), and it expressly permits the
recovery of any “necessary costs of response, incurred by any . . . person consistent with the
national contingency plan,” § 9607(a)(4)(B). CERCLA also provides that “any person may seek
contribution from any other person who is liable or potentially liable” for these response costs.
See § 9613(f)(1). The Supreme Court has described CERCLA’s remedies as “sweeping:
everyone who is potentially responsible for hazardous-waste contamination may be forced to
contribute to the costs of cleanup.” United States v. Bestfoods, 524 U.S. 51, 56 n.1 (1998).
IV.

Standard of Review

Defendants move to dismiss the Complaint pursuant to Federal Rule of Civil Procedure
12(b)(1), asserting that this Court lacks subject matter jurisdiction over Plaintiffs’ RCRA and
common law claims. (Severstal Mot. to Dismiss 1; ArcelorMittal Mot. to Dismiss 12-14.) The
Plaintiffs have the burden of proving that subject matter jurisdiction exists. See Evans v. B.F.
Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). When a defendant challenges subject matter
jurisdiction pursuant to Rule 12(b)(1), “the district court is to regard the pleadings as mere
evidence on the issue, and may consider evidence outside the pleadings without converting the
proceeding to one for summary judgment.” Id. (quoting Richmond, Fredericksburg & Potomac
R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)). The district court should grant the
Rule 12(b)(1) motion to dismiss “only if the material jurisdictional facts are not in dispute and
the moving party is entitled to prevail as a matter of law.” Id.

6

Defendants also move to dismiss the Plaintiffs’ action pursuant to Federal Rule of Civil
Procedure 12(b)(6). The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the
sufficiency of the plaintiff’s complaint. See Edwards v. City of Goldsboro, 178 F.3d 231, 243
(4th Cir. 1999). Except in certain specified cases, a plaintiff’s complaint need only satisfy the
“simplified pleading standard” of Rule 8(a), Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513
(2002), which requires a “short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). The Supreme Court has recently clarified that in order
to survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Generally, when ruling on a 12(b)(6) motion, the court assumes that the facts alleged in the
complaint are true and draws all reasonable factual inferences in the nonmoving party’s favor.
Edwards, 178 F.3d at 244. A complaint need not provide “detailed factual allegations,” but it
must “provide the grounds of [the plaintiff's] entitlement to relief” with “more than labels and
conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S.
at 555 (internal quotations omitted).
Plaintiffs’ Complaint alleges in Count I that Defendants are liable for Plaintiffs’ response
costs under CERCLA. (Compl. ¶¶ 37-47.) Count II of the Complaint seeks a declaratory
judgment that Defendants are liable for a share of Plaintiff’s future response costs under
CERCLA. (Id. ¶¶ 48-49.) Count III alleges that Defendants’ storage, treatment, and handling of
solid or hazardous wastes presents an imminent and substantial endangerment to health and the
environment under Section 7002 of RCRA, 42 U.S.C. § 6972(a)(1)(B), and requests that this
Court order Defendants to eliminate the endangerment. (Id. ¶¶ 50-57.) Counts IV-VII assert

7

claims under Maryland common law for negligence, nuisance, trespass, and strict liability. (Id.
¶¶ 58-80.) Defendants move this Court to dismiss all seven Counts under Federal Rules of Civil
Procedure 12(b)(1) and/or 12(b)(6).
V. Admissibility of Exhibits
As an initial matter, the parties dispute the extent to which this Court may consider
exhibits outside the pleadings in deciding the Motions to Dismiss without converting them to
Rule 56 motions for summary judgment. Defendant Severstal’s Motion includes 29 exhibits and
Defendant ArcelorMittal’s Motion includes 6 exhibits. Defendants claim that all the exhibits can
be considered by this Court in evaluating the Motions to Dismiss, without converting the
motions to Rule 56 motions for summary judgment, because they are all authentic and are either
public records or integral to the claims asserted in the Complaint. (Severstal Mot. to Dismiss 1315.) Plaintiffs assert, however, that only 8 of Defendants’ combined 35 exhibits meet these
criteria. (Pls.’ Opp’n 8.)
In order to resolve this dispute, an important distinction must be drawn between the
evidence a court may consider in reviewing a Rule 12(b)(1) motion to dismiss, as opposed to a
Rule 12(b)(6) motion to dismiss. Where a motion to dismiss under Rule 12(b)(1) presents a
factual challenge to the court’s jurisdiction, a court need not assume that all facts alleged in the
complaint are true.5 Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d
765, 768 (4th Cir. 1991) (“In determining whether jurisdiction exists, the district court is to
regard the pleadings’ allegations as mere evidence on the issue . . . .”); Mortensen v. First Fed.

5

The challenge presented to this Court is factual. With respect to a Rule 12(b)(1) facial
challenge, however, a court must accept all factual allegations in the complaint as true and may
consider only the complaint and the documents on which it is based. See Adams v. Bain, 697
F.2d 1213, 1219 (4th Cir. 1982); Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891
(3d Cir. 1977).
8

Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977) (“In short, no presumptive truthfulness
attaches to plaintiff’s allegations, and the existence of disputed material facts will not preclude
the trial court from evaluating for itself the merits of jurisdictional claims.”); 5B, Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (3d ed. 2004) (“[O]nce a
factual attack is made on the federal court’s subject matter jurisdiction, the district judge is not
obliged to accept the plaintiff’s allegations as true . . . .”). Moreover, a court may consider
matters outside the pleadings in deciding whether it has jurisdiction. Evans v. B.F. Perkins Co.,
166 F.3d 642, 647 (4th Cir. 1999) (“When a defendant challenges subject matter jurisdiction
pursuant to Rule 12(b)(1), the district court . . . may consider evidence outside the pleadings
without converting the proceeding to one for summary judgment.”) (internal citation omitted).
In contrast, in ruling on a motion to dismiss pursuant to Rule 12(b)(6), a court may not
consider extrinsic evidence at the 12(b)(6) stage, generally. A court may, however, “consider a
document that the defendant attaches to its motion to dismiss if the document was integral to and
explicitly relied on in the complaint and if the plaintiffs do not challenge its authenticity.”
CACI Int’l, Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 154 (4th Cir. 2009). An
integral document is a document that by its “very existence, and not the mere information it
contains, gives rise to the legal rights asserted.” Walker v. S.W.I.F.T. SCRL, 517 F. Supp. 2d
801, 806 (E.D. Va. 2007) (emphasis added).6 In addition to integral and authentic exhibits, on a
12(b)(6) motion the court “may properly take judicial notice of matters of public record.” Philips
v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

6

As examples, “courts have found integral the allegedly fraudulent document in a fraud action,
the allegedly libelous magazine article in a libel action, and the documents that constitute the
core of the parties’ contractual relationship in a breach of contract dispute.” Fisher v. Md. Dep’t
of Pub. Safety & Corr. Servs., 2010 U.S. Dist. LEXIS 68772, at *7 (D. Md. July 8, 2010)
(internal quotation and citations omitted).
9

In the instant case, Defendants move this Court to dismiss all seven Counts of the
Complaint pursuant to Rule 12(b)(1).7 (ArcelorMittal Mot. to Dismiss 12-14; Severstal Mot. to
Dismiss 15.) Accordingly, in deciding whether subject matter jurisdiction exists, this Court need
not attach presumptive truthfulness to the facts alleged in the Complaint and may consider all the
attached exhibits without converting the motions to motions for summary judgment. In the
alternative, Defendants move this Court to dismiss Counts I-III, and VII of the Complaint under
12(b)(6). (Severstal Mot. to Dismiss 15, 29; ArcelorMittal Mot. to Dismiss 14, 21.) To the extent
that this Court finds that subject matter jurisdiction exists over these Counts, the Court’s
consideration of the 12(b)(6) motion will be limited to the pleadings and to exhibits that are both
integral and authentic, or matters of public record.
VI. Effect of Bankruptcy Sale Order Entered in the Southern District of New York
For the reasons I have stated in the Opinion I am issuing today in Severstal Sparrows
Point, LLC v. United States Environmental Protection Agency, No. JFM-97-558 (D. Md. July 5,
2011), the Bankruptcy Sale Order entered by the United States Bankruptcy Court for the
Southern District of New York on April 23, 2003 relieves defendants of liability for the release
or migration of hazardous waste and hazardous constituents occurring before April 23, 2003.
VII. Federal Claims
A. Claims For Cost Recovery and Declaratory Relief Under CERCLA

7

Severstal and ArcelorMittal assert that this Court lacks subjects matter jurisdiction over all of
Plaintiffs’ claims because they are barred and enjoined by the Bankruptcy Sale Order. (Severstal
Mot. to Dismiss 15; ArcelorMittal Mot. to Dismiss 12-14.) Additionally, Defendants claim that
Count III should be dismissed for lack of subject matter jurisdiction due to diligent prosecution
(Severstal Mot. to Dismiss 16; ArcelorMittal Mot. to Dismiss 2 n.1), and that Counts IV-VII
should be dismissed for lack of subject matter jurisdiction because these claims are barred by
Maryland’s three year statute of limitations. (Severstal Mot. to Dismiss 26; ArcelorMittal Mot. to
Dismiss 23).
10

Defendants argue that Plaintiffs’ Complaint fails to demonstrate compliance with the
National Contingency Plan (“NCP”), which is one of the prima facie elements for a private cost
recovery claim under CERCLA.8 (ArcelorMittal Mot. to Dismiss 19; Severstal Mot. to Dismiss
15.) In particular, Defendants claim that Plaintiffs’ Complaint cites the wrong standard of NCP
compliance for a private cost recovery claim under Section 107 of CERCLA, 42 U.S.C.
§ 9607(a)(4)(B), because Plaintiffs claim that their response costs are “not inconsistent” with the
NCP, rather than “necessary” and “consistent,” as the statute requires. (ArcelorMittal Mot. to
Dismiss 19.) Additionally, Defendants assert that Plaintiffs have failed to plead facts that
demonstrate their compliance with the NCP regulatory requirements imposed by EPA, detailed
at 40 C.F.R. Part 300. (Id.) Plaintiffs concede that the correct standard for a private cost recovery
claim under CERCLA, 42 U.S.C. § 9607(a)(4)(B), is consistency with the NCP, but claim that
the Complaint contains allegations sufficient to meet this standard and sufficient to demonstrate
compliance with the NCP regulatory requirements. (Pls.’ Opp’n 19.)
A plaintiff seeking to recover response costs under CERCLA must establish that the
plaintiff incurred necessary cleanup costs “consistent with the national contingency plan.” 42
U.S.C. § 9607(a)(4)(B); see also Westfarm Assocs. Ltd. P’shp. v. Washington Suburban Sanitary
Comm’n, 66 F.3d 669, 677 (4th Cir. 1995). At the liability stage, Plaintiff need only “prove that
it incurred some response costs consistent with the NCP,” which would be recoverable under
CERCLA. Sherwin-Williams Co. v. ARTRA Grp., Inc., 125 F. Supp. 2d 739, 752 (D. Md. 2001).

8

ArcelorMittal has also moved to dismiss the claims against it on the independent ground that
ArcelorMittal never owned or operated the Sparrows Point Facility (ArcelorMittal Mot. to
Dismiss 14). That argument ultimately may prove to be well founded. However, in light of
ArcelorMittal’s acknowledgements that it “formerly held an interest in Defendant Severstal
Sparrows Point LLC,” (id. at 17), I will permit discovery to proceed on this issue. ArcelorMittal
may, of course, renew its argument by way of a motion for summary judgment at a later stage of
these proceedings.

11

Response costs are considered “consistent with the NCP” where there is “substantial
compliance” with the NCP. 40 C.F.R. 300.700(c)(3)(i); see also Sherwin-Williams, 125 F. Supp.
2d at 752. “[P]roof of the consistency of the remaining costs may wait until trial on the issue of
damages.” Weyerhaeuser v. Koppers Co., Inc., 771 F. Supp. 1406, 1413 (D. Md. 1991).
By alleging that their response costs are “not inconsistent” rather than “consistent” with
the NCP (see Compl. ¶ 45), Plaintiffs confuse the standard for Government recovery with the
standard for private cost recovery. Compare 42 U.S.C. § 9607(a)(4)(A) (responsible parties are
liable under CERCLA 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”),
with 42 U.S.C. § 9607(a)(4)(B) (responsible parties are liable under CERCLA for “any other
necessary costs of response incurred by any other person consistent with the national
contingency plan”). Nevertheless, I find that Plaintiffs’ Complaint contains factual allegations
sufficient to demonstrate that some of their response costs substantially comply with the NCP.
The Complaint details the investigation and remediation that Plaintiffs have conducted in order
to comply with the NPDES permit. (See Compl. ¶¶ 30-36.) Specifically, Plaintiffs allege that
they have installed a benzene treatment system. (Id. ¶ 35.) The NCP lists treatment of ground
water to reduce or eliminate contamination as an appropriate action to respond to contaminated
ground water. 40 C.F.R. 300 Appx. D(c). Installation of this treatment system thus appears to be
“consistent” with the NCP.9
Defendants also argue that “Plaintiffs fail to allege any facts plausibly demonstrating they
have complied with 40 C.F.R. § 300.700(c)(6), which requires that private parties ‘provide an
opportunity for public comment concerning the selection of the response action.’” (ArcelorMittal

9

The treatment system also appears to be “necessary” given the MDE’s revision of the Shipyard
Site’s NPDES permit. (See Compl. ¶ 34.)
12

Mot. to Dismiss 19-20.) Importantly though, several courts, including this Court, have held that
government oversight of hazardous waste cleanup efforts may serve to satisfy the public
participation and comment element of the NCP. See Sherwin-Williams, 125 F. Supp. 2d at 752;
Bedford Affiliates v. Sills, 156 F.3d 416, 428 (2nd Cir. 1998). The EPA administers NPDES
permitting for each State, “but a State may apply for a transfer of permitting authority to state
officials. If authority is transferred, then state officials . . . have the primary responsibility for
reviewing and approving NPDES discharge permits, albeit with continuing EPA oversight.”
Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 650 (2007). The State of
Maryland is authorized to administer the NPDES program and does so through MDE. See Piney
Run Pres. Ass’n v. Cnty. Comm’rs (Piney Run I), 268 F.3d 255, 265 (4th Cir. 2001).
Plaintiffs allege that after MDE informed Plaintiffs that the benzene requirement should
have been associated with the underdrain pumps, rather than the dewatering/trim pumps, MDE
revised the NPDES permit to contain a new benzene requirement at the underdrain pumps,
effective February 1, 2010. (Compl. ¶¶ 32, 34.) Plaintiffs installed the benzene treatment system
to comply with the revised NPDES. (Id. ¶ 35.) There has thus been MDE involvement during
Plaintiffs’ remediation process sufficient to satisfy the public participation and comment
requirement under the NCP. Moreover, Plaintiffs’ NPDES permit itself was subject to a public
comment period. See Md. Code Ann., Envir. § 9-324(d). Plaintiffs have therefore met their
burden of demonstrating that at least some of their response costs substantially comply with the
NCP for liability purposes.
B. RCRA Claims
1. Coke Oven Area as Basis for RCRA Claim

13

Next, Defendants claim that Count III fails to state a claim under RCRA because the coke
ovens that were the alleged source of benzene ceased operations years before Defendants
acquired the Steel Mill Site. (ArcelorMittal Mot. to Dismiss 21-22; Severstal Mot. to Dismiss 1516.) Defendants correctly argue that in order to state a RCRA “imminent and substantial
endangerment” claim against Defendants, Plaintiffs must allege facts demonstrating that
Defendants “contributed or . . . [are] contributing to the past or present handling, storage,
treatment, transportation, or disposal,” see 42 U.S.C. § 6972(a)(1)(B), of the “[b]enzene and
other wastes associated with the operations at the coke oven area” upon which their claims are
based (see Compl. ¶ 56). Defendants claim that because the coke ovens ceased operations in
December 1991, before Defendants acquired the Steel Mill Site, neither ArcelorMittal nor
Severstal could have “contributed” to the coke oven waste on which Plaintiffs base their
“imminent or substantial endangerment” under RCRA (ArcelorMittal Mot. to Dismiss 21-22)
because a claim under RCRA, 42 U.S.C. § 6972(a)(1)(B), requires a well-pled allegation of
“active” contribution to the handling, treatment, transportation, or disposal of hazardous waste
(ArcelorMittal Reply Mem. 20).
Under RCRA, “disposal” is defined as “the discharge, deposit, injection, dumping,
spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so
that such solid waste or hazardous waste or any constituent thereof may enter the environment or
be emitted into the air or discharged into any waters, including ground waters.” 42 U.S.C. §
6903(3).10 It is well established in the Fourth Circuit that the term “disposal” includes passive
migration. See Nurad, Inc. v. William E. Hooper & Sons Co., 966 F.2d 837, 845 (4th Cir. 1992).
Based upon this interpretation of “disposal,” the Nurad Court held that a former owner of a

10

CERCLA incorporates by reference the RCRA definition of “disposal.” See 42 U.S.C. §
9601(29).
14

manufacturing facility could be held liable under CERCLA for passive migration of hazardous
substances that occurred during ownership, even if the former owner took no active role in the
management of the underground storage tanks that leaked the hazardous substances. See Nurad,
Inc., 966 F.2d at 844-48.
Importantly, though, Nurad concerned alleged violations of Section 107 of CERCLA,
which imposes liability upon “any person who at the time of disposal of any hazardous substance
owned or operated any facility at which such hazardous substances were disposed of.” 42 U.S.C.
§ 9607(a)(2). Accordingly, ownership of a facility where passive migration occurred is sufficient
to incur liability under CERCLA. In contrast, Section 7002 of RCRA, 42 U.S.C. §
6972(a)(1)(B), permits citizen suits against a “past or present owner or operator of a treatment,
storage, or disposal facility, who has contributed or who is contributing to the past or present
handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which
may present an imminent and substantial endangerment to health or the environment.” RCRA
thus requires the additional showing of “contribution” to the “disposal” of hazardous waste in
order for liability to attach.
Neither RCRA nor its regulations define “contribute to.” I therefore rely on the basic
principle that an undefined statutory phrase must be given its “ordinary or natural meaning.” Air
Line Pilots Ass’n, Int’l v. US Airways Grp., Inc., 609 F.3d 338, 342 (4th Cir. 2010) (quoting
FDIC v. Meyer, 510 U.S. 471, 476 (1994)). The Eighth Circuit has noted that the plain meaning
of “contribute to” is “to have a share in any act or effect,” United States v. Aceto Agric. Chems.
Corp., 872 F.2d 1373, 1384 (8th Cir. 1989) (citing Webster’s Third New International Dictionary
496 (1961)). The Seventh Circuit has found that the ordinary meaning of “contribute” is “to act

15

as a determining factor.” Sycamore Indus. Park Assocs. v. Ericsson, Inc., 546 F.3d 847, 854 (7th
Cir. 2008) (citing Webster's II New College Dictionary (2005)).
The plain meaning of “contribute to” is not to be considered in a vacuum. As the Eighth
Circuit explained in Aceto, RCRA’s “relevant legislative history supports a broad, rather than a
narrow, construction of the phrase ‘contributed to.’ Although RCRA’s contemporaneous
legislative history is not very helpful . . . subsequent reports which reviewed the statute after
enactment expressly state that ‘contributing to’ is to be liberally construed.” Aceto, 872 F.2d at
1383 (citing H.R. Rep. No. 96-IFC 31 at 31 (1979) (the Eckhardt Report); S. Rep. No. 96-172, at
5 (1980), reprinted in 1980 U.S.C.C.A.N. 5019, 5023); accord United States v. Waste Indus.,
Inc., 734 F.2d 159, 167 (4th Cir. 1984). This is in keeping with the liberal construction generally
accorded to RCRA because it is “a remedial statute.” Aceto, 872 F.2d at 1383.
Nevertheless, many of the courts considering this issue have read RCRA to require
affirmative action rather than mere passive conduct—such as failing to remediate contamination
and prevent its passive migration (see Pls.’ Opp’n 22). See Sycamore Indus. Park Assocs. v.
Ericsson, Inc., 546 F.3d 847, 854 (7th Cir. 2008) (“By definition, the phrase ‘has contributed or
is contributing’ requires affirmative action.”); ABB Indus. Sys., Inc. v. Prime Tech., Inc., 120
F.3d 351, 359 (2d Cir. 1997) (“Because [plaintiff] cannot show that [defendants] spilled
hazardous chemicals or otherwise contaminated the site, [plaintiff] cannot establish that the
defendants have contributed or are contributing to an endangerment to the environment.”);
Interfaith Cmty. Org. v. Honeywell Int’l, 263 F. Supp. 2d 796, 844 (D.N.J. 2003) (“[A]
straightforward reading of RCRA compels a finding that only active human involvement with
the waste is subject to liability under RCRA § 7002 (a)(1)(B).”); Delaney v. Town of Carmel, 55
F. Supp. 2d 237, 256 (S.D.N.Y. 1999) (“The term [‘contributed to’] has been universally held to

16

infer something more than mere ownership of a site; some level of causation between the
contamination and the party to be held liable must be established.”).11
Plaintiffs have alleged that the “operation of the coke ovens and facilities associated with
the coke ovens . . . at the Steel Mill Site has resulted in releases of hazardous substances,” which
have migrated or are migrating to the Shipyard Site. (Compl. ¶ 24.) Defendants argue that such
allegations are insufficient to plead an imminent and substantial endangerment claim under
RCRA because the coke ovens ceased operations years before Defendants acquired the Steel
Mill Site. (See ArcelorMittal Mot. to Dismiss 22.) I agree. Because RCRA requires
“contribution” to “disposal” of hazardous waste, rather than simply “disposal” during
“ownership,” as required by CERCLA, Defendants could not have “contributed” to the
“disposal” of hazardous waste generated by the coke ovens. Accordingly, I grant Defendants’
Motions to Dismiss Count III insofar as Plaintiffs’ RCRA claims relate to releases resulting from
operations at the Coke Oven Area that occurred before Defendants acquired the Steel Mill Site.
2. Diligent Prosecution
Defendants also argue that Count III is statutorily barred by EPA and MDE’s diligent
prosecution of the same RCRA claim and must be dismissed for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1). (ArcelorMittal Mot. to Dismiss 2 n.1; Severstal Mot. to
Dismiss 16-24.) RCRA grants primary enforcement responsibility to the state and federal
governments, while citizen suits are meant “to supplement rather than supplant governmental
action.” Piney Run Pres. Ass’n v. Cnty. Comm’rs (Piney Run II), 523 F.3d 453, 456 (4th Cir.
2008) (citing Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 60

11

The Fourth Circuit has yet to interpret the language “has contributed or is contributing” under
RCRA.
17

(1987)).12 Accordingly, Section 7002 of RCRA provides for citizen suits under certain conditions
only, and prohibits such suits where the government “has commenced and is diligently
prosecuting” an action involving the same claim against an alleged violator. 42 U.S.C. § 6972(b).
Defendants claim that the consolidated action commenced by EPA and MDE in 1997, see
Maryland v. Bethlehem Steel Corp., No. JFM-97-558 (D. Md. filed Feb. 25, 2007), fully covers
the scope of Plaintiffs’ claims in this Count, and that EPA and MDE continue to diligently
prosecute through implementation of the Consent Decree. (Severstal Mot. to Dismiss 17.)
Plaintiffs respond that their RCRA claim is not barred by diligent prosecution because their
claims derive from the ongoing release and migration of benzene from the Steel Mill Site to the
Shipyard Site, which Plaintiffs claim is not covered by the Consent Decree. (Pls.’ Opp’n 24.) In
the alternative, Plaintiffs argue that even if their claims overlap with the Consent Decree, the
Consent Decree has not been diligently enforced. (Id. at 26.) I take up each of these claims
separately.
a. Scope of the Consent Decree
While RCRA contains a diligent prosecution bar to citizen suits, if the citizen suit seeks
to enforce different standards or regulations, see Dodge v. Mirant Mid-Atl., LLC, 732 F. Supp. 2d
578, 585 (D. Md. 2010), or concerns releases of a different pollutant, see Sanchez v. Esso
Standard Oil Co., 572 F.3d 1, 12 (1st Cir. 2009), than the government enforcement action, the

12

Both Piney Run II and Gwaltney involved claims under the Clean Water Act (“CWA”), but
RCRA and the CWA contain the same “diligent prosecution” bar to citizen suits. Courts have
found it appropriate to interpret the language in both statutes in the same manner. See Ailor v.
City of Maynardsville, 368 F.3d 587, 601 (6th Cir. 2004) (finding that RCRA citizen suits can be
brought “in substantially the same capacity as provided for in the CWA”); Cox v. City of Dallas,
256 F.3d 281, 308 (5th Cir. 2001) (“We are persuaded that the similarity of the citizen suit
provisions of the CWA and the RCRA requires like interpretation.”); Supporters to Oppose
Pollution v. Heritage Grp., 973 F.2d 1320, 1324 (7th Cir. 1992) (citing to a CWA citizen suit to
determine the standard for diligent prosecution in a RCRA citizen suit).
18

citizen suit will not be precluded by the government action. The key inquiry thus becomes
whether EPA and MDE’s claims that led to the 1997 Consent Decree, and the Consent Decree
itself, address Plaintiffs’ RCRA claims. To the extent that they do, and that the Consent Decree
is being implemented to resolve these claims, Plaintiffs’ citizen suit is barred.
Count III of Plaintiffs’ Complaint specifically alleges that “benzene and other wastes
associated with the operations at the coke oven area at the Steel Mill Site are solid or hazardous
wastes,” which are presenting an imminent and substantial endangerment to health or the
environment, in violation of RCRA Section 7002(a)(1)(B), 42 U.S.C. § 6972(a)(1)(B). (Compl.
¶¶ 56-57.) Plaintiffs contend that these claims of release and migration of benzene from the Steel
Mill Site to the Shipyard Site are not covered by the Consent Decree. (Pls.’ Opp’n 24.) Plaintiffs’
argument regarding the release of hazardous waste at the Steel Mill Site is unpersuasive.
Plaintiffs’ claim regarding migration of hazards poses a more complicated question, however.
The Consent Decree was entered in response to the claims filed by EPA and MDE in
1997, which alleged unlawful discharges of hazardous waste, threatening human health or the
environment under Section 7002(a) of RCRA, 42 U.S.C. § 6972(a). (See Severstal Mot. to
Dismiss, Exs. 3 & 4.) In addition, the MDE complaint expressly refers to unlawful releases at the
Coke Oven Area in alleging violations of Section 7002(a) of RCRA, 42 U.S.C. § 6972(a) (see
Severstal Mot. to Dismiss, Ex. 4 at ¶ 20), thus making an allegation of unlawful release that is
practically indistinguishable from Plaintiffs’ RCRA claim in Count III.
Moreover, the Consent Decree itself requires the implementation of corrective measures,
including interim measures, in order to address releases at or from the Sparrows Point Facility
that pose a threat to human health or the environment. (Severstal Mot. to Dismiss, Ex. 1 at 8-15.)
Specifically, Section V.B. mandates a site-wide investigation (“SWI”) of environmental

19

conditions. (Id., Ex. 1 at 13-14 & Attach. B.) The “Conceptual Plan for the Site Wide
Investigation,” incorporated by reference into the Consent Decree, states the purpose and
approach of the SWI: “[t]he SWI shall be a comprehensive evaluation of the potential for both
current and future risk to human health and the environment from current and past releases of
hazardous wastes and hazardous constituents at the Facility.” (Id., Ex. 1, Attach. B.) This
Conceptual Plan requires an area-specific characterization of the Coke Oven Area, based on
sampling of subsurface conditions, contamination, and releases. (Id., Ex. 1, Attach. B at 4.) The
Consent Decree is thus clearly designed to address the release of hazardous waste, and
particularly the release of hazardous waste from the Coke Oven Area. Accordingly, to the extent
that Plaintiffs allege unlawful releases by Defendants under RCRA, I find that the overlap
between Plaintiffs’ RCRA claims in Count III and the claims brought by EPA and MDE, as well
as the resulting Consent Decree, precludes Plaintiffs’ citizen suit. See 42 U.S.C.
§ 6972(b)(2)(C)(i).
Plaintiffs also allege, however, that Defendants are responsible for the continued
migration of hazardous substances to the Shipyard Site. (See Compl. ¶ 24.) The Shipyard Site
was subject to the Consent Decree, which was designed to address contamination at the entire
Sparrows Point Facility, until EPA and MDE approved the removal of the Shipyard Site from the
Consent Decree in 2006. (See Severstal Mot. to Dismiss, Ex. 29.) Therefore, migration of
hazardous substances to the Shipyard Site that occurred after the Shipyard Site was removed
from the Consent Decree in 2006 is not covered by the Consent Decree, and Plaintiffs’ RCRA
claims relating to post-2006 migration of hazardous substances are not precluded by the diligent
prosecution bar. However, the portion of Plaintiffs’ claims relating to post-2006 migration of
hazardous substances, while not barred by diligent prosecution, falls within the ambit of

20

excluded BSC liabilities under the Bankruptcy Sale Order if they “result[] from the transport,
disposal or treatment of any Hazardous Materials by any Seller on or prior to the Closing Date to
or at any location other than the Real Property.” (Severstal Mot. to Dismiss, Ex. 6 at 6.) That is,
to the extent Plaintiffs claim that migration of hazardous substances from the Steel Mill Site to
the Shipyard Site occurred after 2006, but resulted from discharge or dumping of the hazardous
substances occurring on or prior to the Closing Date of April 23, 2003, those claims are barred
by the Bankruptcy Sale Order. As a result, the only RCRA claim that survives Defendants’
Motions to Dismiss is a very narrow one: migration of hazardous substances that occurred after
the Shipyard Site was removed from the Consent Decree in 2006, resulting from releases of
hazardous substances that occurred after April 23, 2003.
b. Diligent Enforcement of the Consent Decree
Plaintiffs argue that to the extent there is overlap between their RCRA claims and the
Consent Decree, as I find there is, the Consent Decree has not been diligently enforced. (Pls.’
Opp’n 26.) Plaintiffs have the burden of proving that prosecution is not diligent. Cmty. of
Cambridge Envtl. Health & Dev. Grp. v. City of Cambridge, 115 F. Supp. 2d 550, 554 (D. Md.
2000). “This burden is a heavy one because diligence on the part of the enforcement agency is
presumed.” Id. (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 890 F. Supp. 470,
487 (D.S.C. 1995)); see also Karr v. Hefner, 475 F.3d 1192, 1198 (10th Cir. 2007) (“Citizenplaintiffs must meet a high standard to demonstrate that [a government agency] has failed to
prosecute a violation diligently.”).
The Fourth Circuit has held that a prosecution is “diligent” where the action “is capable
of requiring compliance with the Act and is in good faith calculated to do so.” Piney Run II, 523
F.3d at 459. The citizen suit provision “‘does not require government prosecution to be far-

21

reaching or zealous. It requires only diligence.’ Thus, a citizen-plaintiff cannot overcome the
presumption of diligence merely by showing that the agency’s prosecution strategy is less
aggressive than he would like or that it did not produce a completely satisfactory result.” Id.
(citing Karr, 475 F.3d at 1197). Administrative decisions, including consent decrees, are given
deference because a court “must be particularly deferential to the agency’s expertise” and should
not interpret the scope of the “diligent prosecution” bar “in a manner that would undermine the
[government agency’s] ability to reach voluntary settlements with defendants.” Id. (internal
quotation omitted). Courts have found that consent decrees, and their enforcement, amount to
diligent prosecution. See, e.g., id. at 460; Community of Cambridge, 115 F. Supp. 2d at 556.
Plaintiffs’ arguments for lack of diligent prosecution center on the migration of benzene,
rather than its release. (See Pls.’ Opp’n 27 (“[E]ven if the Consent Decree covered some or all of
Plaintiffs’ claims, it has not been diligently enforced with respect to the migration of benzene to
the Shipyard Site.”).) However, to the extent Plaintiffs argue that the Consent Decree has not
been diligently enforced with respect to releases of benzene or pre-2006 migration of benzene to
the Shipyard Site, Plaintiffs have not met their burden of proving that enforcement is not
diligent. Plaintiffs claim only that “13 years have passed since the entry of the Consent Decree
and Defendants have still not stopped the migration of benzene from the Steel Mill Site to the
Shipyard Site.” (Pls.’ Opp’n 27.) Diligent prosecution, however, “does not require success, but
rather that an agency ‘try, diligently.’” Cmty. of Cambridge, 115 F. Supp. 2d at 555 (citing
Supporters to Oppose Pollution Inc. v. Heritage Grp., 973 F.2d 1320, 1324 (7th Cir. 1992)).
EPA and MDE filed claims, executed and entered a Consent Decree, and continue to
oversee implementation of the Consent Decree. Since entry of the Consent Decree in 1997, the
owners of the Severstal Sparrows Point Facility have conducted multiple studies of the

22

groundwater system in order to identify the extent of contamination, completed a facility
investigation and human health risk evaluation, repaired and/or replaced sumps and storage
tanks, constructed a full-scale pilot hydrocolone facility to recycle blast furnace gas cleaning
slurry solids/filter cake, conducted maintenance dredging operations to remove material from Tin
Mill Canal, and operated a groundwater pump as an interim measure, among other remediation
efforts. (See Severstal Mot. to Dismiss 8-10.) Moreover, EPA and MDE have sought interim
measures at locations throughout the Severstal Sparrows Point Facility, including the Coke Oven
Area (see id. at 10), and have partially disapproved Severstal’s proposed workplans, resulting in
the dispute resolution currently pending in this Court that I am deciding today in my opinion
issued in Severstal Sparrows Point, LLC v. United States Environmental Protection Agency, No.
JFM-97-558 (D. Md. July 5, 2011). This pending action is further evidence that EPA and MDE
are “diligently prosecuting an action under subsection (a)(1)(B).” 42 U.S.C. § 6972(b)(2)(C)(i).
Accordingly, I find that with the exception of any narrow claims relating to post-2006 migration
of hazardous substances released post-2003, Plaintiffs’ RCRA claims in Count III of the
Complaint are barred by diligent prosecution.13

13

In the alternative, Defendants argue that this Court should “abstain from considering these
claims based on the doctrine of primary jurisdiction due to EPA and MDE’s expertise and
continuing jurisdiction over remediation matters at the Sparrows Point Facility.” (Severstal Mot.
to Dismiss 24.) The doctrine of primary jurisdiction “is a doctrine specifically applicable to
claims properly cognizable in court that contain some issue within the special competence of an
administrative agency. It requires the court to enable a ‘referral’ to the agency, staying further
proceedings so as to give the parties reasonable opportunity to seek an administrative ruling.”
Reiter v. Cooper, 507 U.S. 258, 268 (1993). The doctrine has been deemed to apply to
circumstances in which federal litigation raises a difficult, technical question that falls within the
expertise of a particular agency. See, e.g., Am. Auto. Mfrs. Ass’n. v. Mass. Dep’t of Envtl. Prot.,
163 F.3d 74, 81 (1st Cir. 1998).
Plaintiffs argue that this Court should not apply the doctrine because RCRA claims are
“well within this Court’s competence to decide and will not interfere with the regulatory
agencies’ proceedings under the Consent Decree.” (Pls.’ Opp’n 27.) Plaintiffs cite to several
RCRA cases in which the court has declined to invoke the doctrine of primary jurisdiction based
23

VII. State Common Law Claims
Finally, Defendants argue that the three-year statute of limitation for civil claims in
Maryland, Md. Code Ann., Cts. & Jud. Proc. § 5-101, bars Plaintiffs’ claims for negligence
(Count IV), trespass (Count V), nuisance (Count VI), and strict liability (Count VII).
(ArcelorMittal Mot. to Dismiss 23-24; Severstal Mot. to Dismiss 26-29.) Defendants claim that
these claims accrued in 2004 when the Shipyard Site was acquired because Plaintiffs had notice
and actual knowledge of potential contamination at that time. (Severstal Mot. to Dismiss 28.) In
support of this contention, Defendants state that because the Consent Decree was subject to
public notice, and because the deeds through which BSC transferred the property to Baltimore
Marine, and Baltimore Marine to SPS LLLP, referenced the Consent Decree, Plaintiffs had
notice of potential contamination when they purchased the Shipyard Site in 2004. (Id. at 28-29.)
Defendants also argue that Plaintiffs’ VCP application, submitted in February 2004,
demonstrates that Plaintiffs had actual knowledge that the Shipyard Site was contaminated. (Id.
at 29.)
In response, Plaintiffs argue that their claims accrued, at the earliest, on September 5,
2005, when MDE sent Plaintiffs a letter informing Plaintiffs that the NPDES permit for the
Shipyard Site should have contained a benzene requirement associated with the underdrain
pumps, rather than the dewatering/trim pumps, and requesting that Plaintiffs sample for benzene
at the underdrain pumps. (Pls.’ Opp’n 35.) Only upon sampling the graving dock pump outfall

on congressional direction as to when federal district courts should entertain such suits. (Id. at
28.) See, e.g., PMC, Inc. v. Sherwin-Williams Co., 151 F.3d 610, 619 (7th Cir. 1998) (declining
to apply the doctrine of “primary jurisdiction” to a RCRA citizen suit because “[t]hat would be
an end run around RCRA. Congress has specified the conditions under which the pendency of
other proceedings bars suit under RCRA,” and where “those conditions have not been satisfied,”
the district court should hear the case). I find Plaintiffs’ arguments persuasive, and to the extent
that Plaintiffs’ Count III survives Defendants’ Motions to Dismiss, this Court will not abstain
from considering it under the doctrine of primary jurisdiction.
24

for pollutants did Plaintiffs discover that the benzene levels were four times the level permitted
under the NPDES permit. (Id.) Less than three years later, in September 2008, Plaintiffs entered
into a Tolling Agreement with Defendants, which suspended the running of limitations as of
August 28, 2008. (Id. at 35 & Ex. 4.) Accordingly, Plaintiffs assert that their common law claims
are not barred by the statute of limitations as fewer than three years passed between September 5,
2005 and August 28, 2008. (Id. at 35.)
The Maryland Code provides that “[a] civil action at law shall be filed within three years
from the date it accrues . . . .” Md. Code Ann., Cts. & Jud. Proc. § 5-101. In the absence of
statutory guidance, determination of when an action “accrues” has been left to the courts, which
have adopted the “discovery rule.” See Pappano v. Chevy Chase Bank, 806 A.2d 334, 338 (Md.
Ct. Spec. App. 2002). Under the discovery rule, “a statute of limitations [is] triggered when a
plaintiff knows or, with the exercise of reasonable diligence, should have known, of the
existence of an injury.” Id. More specifically, “a plaintiff is [] on inquiry notice, and thus the
statute of limitations will begin to run, when the plaintiff has ‘knowledge of circumstances which
would cause a reasonable person in the position of the plaintiff[] to undertake an investigation
which, if pursued with reasonable diligence, would have led to knowledge of the alleged [tort].’”
Lumsden v. Design Tech Builders, Inc., 749 A.2d 796, 802 (Md. 2000) (quoting O'Hara v.
Kovens, 503 A.2d 1313, 1324 (Md. 1986)).
Of course, when ruling on a 12(b)(6) motion, the court assumes that the facts alleged in
the complaint are true and draws all reasonable factual inferences in the nonmoving party’s
favor. Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). Because “the question
of notice generally requires the balancing of factual issues and the assessment of credibility or
believability of the evidence . . . ‘whether or not the plaintiff’s failure to discover his cause of

25

action was due to failure on his part to use due diligence . . . is ordinarily a question of fact for
the jury.’” Frederick Rd. Ltd. P’ship v. Brown & Sturm, 756 A.2d 963, 974 (Md. 2000) (quoting
O'Hara, 503 A.2d at 1320). Accordingly, taking the facts in the light most favorable to Plaintiffs,
I must decide whether Plaintiffs had inquiry notice of contamination at the Shipyard Site more
than three years prior to entering into the Tolling Agreement with Defendants, 14 which
suspended the running of limitations as of August 28, 2008, or whether a reasonable jury could
conclude otherwise.
As indicated above, Defendants contend that Plaintiffs were on inquiry notice because the
Consent Decree was subject to public notice before Plaintiffs acquired the Shipyard Site, and
because the deeds through which the Shipyard Site was transferred to Plaintiffs contained
references to the Consent Decree. (Severstal Mot. to Dismiss 28-29.) The deeds contain the same
language:
EXCEPTING AND RESERVING, HOWEVER, to Bethlehem, its successors
and assigns, the right to enter upon the above-described tract of land at all
reasonable times during the pendency of the Consent Decree lodged on
February 25, 1997, in the cases of United States of America v. Bethlehem

14

ArcelorMittal argues that it was not a party to the Tolling Agreement because it was not a
signatory to the September 5, 2008 Tolling Agreement, and is not included in the “parties”
designated to receive notices in the Agreement. (ArcelorMittal Reply 21-22.) ArcelorMittal
echoes its earlier argument regarding owner and operator liability in claiming that the Tolling
Agreement cannot be binding on ArcelorMittal because it refers to “predecessors” and “[t]he
only preceding owner and operator of the Facility before Severstal Sparrows Point, LLC was
BSC . . . .” However, the Tolling Agreement states that it was entered into by Severstal Sparrows
Point, LLC f/k/a ISG Sparrows Point, LLC and “its parents, subsidiaries, affiliated companies,
predecessors, successors, and assigns (collectively, ‘Steel Mill Parties’) . . . .” (Pls.’ Opp’n, Ex.
4 at 1.) The Tolling Agreement further specifies that “[t]he Steel Mill Parties are the current or
former owners of the steel mill in Sparrows Point, Baltimore County, Maryland . . . .” (Id.)
Because ArcelorMittal admits that it “formerly held an interest in Defendant Severstal Sparrows
Point, LLC,” (ArcelorMittal Mot. to Dismiss 17), and because at this stage in the litigation,
Plaintiffs have adequately alleged a chain of ownership involving ArcelorMittal sufficient to
survive ArcelorMittal’s Motion to Dismiss, see supra note 8, I find that there is a dispute of
material fact regarding whether the Tolling Agreement is binding on ArcelorMittal and reject
ArcelorMittal’s argument in this regard.
26

Steel Corporation Civil Action No. JFM-97-559 and Maryland v. Bethlehem
Steel Corporation Civil Action No. JFM-97-558, in the United States District
Court for the District of Maryland so that Bethlehem may perform the
obligations imposed upon Bethlehem pursuant to the terms and conditions of
the Consent Decree. In the event the Environmental Protection Agency or the
Maryland Department of the Environment, after receiving the report more
particularly referred to in Section V.C. of the Consent Decree [the “Corrective
Measures Study” report] requires remedial work to be done on the abovedescribed tract of land, Bethlehem shall have the further right to enter upon
the above-described tract of land at all reasonable times to perform such
remedial work, including any operation and maintenance work and
monitoring.
(Id., Ex. 26, at 6 & Ex. 27, at 5-6.) Plaintiffs correctly observe that pursuant to Section V.C.1 of
the Consent Decree, the Corrective Measures Study report is due within 30 days after EPA and
MDE issue final approval of the Site Wide Investigation Report. (Pls.’ Opp’n 33 n.6; Severstal
Mot. to Dismiss, Ex. 1 at 14.) However, to date EPA and MDE have yet to issue such final
approval. As such, no Corrective Measure Study report has been provided, and neither BSC nor
Defendants have been ordered to perform remedial work on the Shipyard Site, the potential for
which was contemplated by the deeds. Plaintiffs contend that consequently, the deeds did not put
Plaintiffs on notice of the benzene contamination migrating to the Shipyard Site, and therefore
did not start the running of limitations with respect to Plaintiffs’ common law claims. (Pls.’
Opp’n 33 n.6.)
Defendants argue that in addition to inquiry notice, Plaintiffs had actual knowledge of
contamination at the Shipyard Site based on the application to Maryland’s VCP submitted by
Plaintiffs on February 22, 2004. (Severstal Mot. to Dismiss 29.) Plaintiffs argue, however, that a
closer look at the VCP application belies Defendants’ claim. (Pls.’ Opp’n 33 & n.7.) Plaintiffs
highlight that the application’s cover letter states, “the shipyard which is to be acquired by SPS
Limited Partnership, LLLP (‘SPS’), in significant part, is unaffected by contamination [at the
27

Steel Mill Site].” (Severstal Mot. to Dismiss, Ex. 28.) Additionally, the Phase I Environmental
Assessment of the Shipyard Site attached to the VCP application reveals that no investigation of
the Shipyard Site had been conducted, nor would be conducted for several years, and therefore,
the extent of contamination at the Shipyard Site, if any, was unknown.15 (See Severstal Mot. to
Dismiss, Ex. 28 at II-1 – II-2.) The Phase I Environmental Assessment does state “that
contamination from at least one of [the five special study areas], the Coke Oven Area, could be
impacting the [Shipyard] Site,” (id., Ex. 28 at III-23), but Plaintiffs argue that because the same
Assessment states that “comprehensive investigation of the [Shipyard] Site is considered a low
priority and . . . is not expected to begin for several more years,” (id., Ex. 28 at III-24), the
“unsubstantiated suspicion that groundwater contamination from the Steel Mill Site might be
impacting the Shipyard Site is not sufficient to start the running of limitations,” (Pls.’ Opp’n 33
n. 7).
Defendants cite the September 29, 2004 Phase II Work Plan as conclusive evidence that
Plaintiffs had actual knowledge of the benzene contamination at the Coke Oven Area, and that
the flow of contaminant migration might be pulled towards the Shipyard Site’s Graving Dock by
the seepage pumps:
The primary constituents detected were benzene and naphthalene. Benzene
concentrations up to 1,100 mg/l and naphthalene up to 5.1 mg/l have been
detected in the shallow zone. In the intermediate zone benzene has been
detected at concentrations up to 390 mg/l and naphthalene has been detected
at concentrations up to 3.5 mg/l. The most significant of these groundwater

15

The Phase I Environmental Assessment of the Shipyard Site states, “Although the [Shipyard]
property was owned by BSC at the time of the [RCRA Facility Assessment (‘RFA’)], [it] was
excluded from the scope of the RFA. For this reason, no specific actions in the Consent Decree
are directed at the [Shipyard] property. However, the Consent Decree also specifies a required
‘site-wide’ investigation that includes the [Shipyard property]. BSC has agreed to perform an
RFA of the [Shipyard] Site; however, according to USEPA representative, the Site is considered
a low priority and the RFA is not expected to begin for several more years.” (Severstal Mot. to
Dismiss, Ex. 28 at II-1 – II-2.)
28

impacts are observed on the northeast side (downgradient) of the Coke Oven
area. These wells are located approximately 400 feet upgradient/sidegradient
of the Shipyard Site. The lateral extent of these groundwater impacts have not
been fully defined. There exists a suggestion, based on the available data, that
the seepage pumps associated with the Graving Dock may influence the flow
of this plume.
(Pls.’ Opp’n, Ex. 2 at 6.) Defendants argue that “[i]t defies all reason for Plaintiffs to now claim
that they had no knowledge of the potential for contamination of the Shipyard Site from the Steel
Mill Site if they knew of the closely located benzene contamination in September 2004, and had
proposed groundwater investigations to evaluate off-site releases at that time.” (Severstal Reply
18.)
Plaintiffs may well have had actual notice of contamination when they submitted the
application to Maryland’s VCP on February 22, 2004, but I find they certainly had inquiry
notice. It is clear that Plaintiffs knew “or, with the exercise of reasonable diligence, should have
known, of the existence of an injury.” Pappano, 806 A.2d at 338. 16 Because the Phase I
Environmental Assessment that Plaintiffs attached to the VCP application states “that
contamination from at least one of [the five special study areas], the Coke Oven Area, could be
impacting the [Shipyard] Site,” it is clear that Plaintiffs had “knowledge of circumstances which
would cause a reasonable person in the position of the plaintiff[] to undertake an investigation
which, if pursued with reasonable diligence, would have led to knowledge of the alleged [tort].”
Lumsden, 749 A.2d at 802 (quoting O'Hara, 503 A.2d at 1324). Accordingly, I find that there is
no genuine issue of material fact as to when Plaintiffs’ common law claims accrued, and that the

16

 Plaintiffs were also aware when they purchased the Shipyard Site in March 2004 that, pursuant
to the Consent Decree, remediation might be required at the Shipyard Site. (Severstal Mot. to
Dismiss, Ex. 26, at 6 & Ex. 27, at 5-6.) Moreover, by September 2004, Plaintiffs were aware that
contamination from the Coke Oven Area could be affecting the Shipyard Site (Severstal Mot. to
Dismiss, Ex. 28 at III-23), and that benzene contamination had been detected at the Coke Oven
Area 400 feet upgradient/sidegradient from the Shipyard Site (Pls.’ Opp’n, Ex. 2 at 6).

29

statute of limitations began to run in February 2004. 17 Plaintiffs’ common law claims are
therefore barred by Maryland’s statute of limitations as more than three years passed between
February 22, 2004 and August 28, 2008. Defendants’ Motions to Dismiss Counts IV-VII are
granted.

A separate order is being entered herewith.

July 5, 2011
Date

/s/
J. Frederick Motz
United States District Judge

17

Plaintiffs argue in the alternative that their common law claims for trespass (Count V) and
nuisance (Count VI) are not barred by the three-year statute of limitations because those claims
continue to accrue with continued migration of the contamination onto Plaintiffs’ property. (Pls.’
Opp’n 35.) “The ‘continuing harm’ or ‘continuing violation’ theory tolls the statute of limitations
in situations where there are ongoing violations of a potential plaintiff’s rights.” MacBride v.
Pishvaian, 937 A.2d 233, 235 (Md. 2007). However, the “continuing harm” theory “only tolls
the statute of limitations ‘unless the potential plaintiff sooner knew or should have known of the
injury or harm.’” Id. at 241 (citing Duke St. Ltd. P’shp. v. Bd. of Cnty. Comm’rs, 684 A.2d 40, 48
(Md. Ct. Spec. App. 1996)). Because I find that Plaintiffs had inquiry notice that benzene
contamination generated at the Steel Mill Site was potentially migrating towards the Shipyard
Site as of February 2004, the “continuing harm” theory does not toll the statute of limitations in
this case.
30