Gould Electronics Inc. v. Livingston County Road Commission
Filing
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OPINION AND ORDER Denying Defendant's Motion to Dismiss (Dkt. 26 ) and Denying Plaintiff's Motion For Appointment of an Independent Expert Witness (Dkt. 31 ). Signed by District Judge Mark A. Goldsmith. (MacKay, K)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
GOULD ELECTRONICS, INC.,
Plaintiff,
Case No. 17-cv-11130
HON. MARK A. GOLDSMITH
vs.
LIVINGSTON CTY. ROAD COMM’N,
Defendant.
__________________________________/
OPINION & ORDER
DENYING DEFENDANT’S MOTION TO DISMISS (Dkt. 26) AND DENYING
PLAINTIFF’S MOTION FOR APPOINTMENT OF AN INDEPENDENT EXPERT
WITNESS (Dkt. 31)
This matter is currently before the Court on Defendant Livingston County Road
Commission’s (“LCRC”) second motion to dismiss (Dkt. 26) and Plaintiff Gould Electronics,
Inc.’s (“Gould”) motion for appointment of an independent expert witness (Dkt. 31). The motions
have been fully briefed. Because oral argument will not aid the decisional process, the motions
will be decided based on the parties’ briefing. See E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b).
For the reasons that follow, the Court denies both motions.
I.
BACKGROUND
Gould initiated a lawsuit against LCRC on July 6, 2009. Gould Electronics, Inc. v.
Livingston Cty. Rd. Cmm’n, No. 4:09-cv-12633 (E.D. Mich). In short, the dispute concerned the
“determination of responsibility for costs associated with the cleanup and remediation of
trichloroethylene (TCE) contamination on two adjacent parcels of real property and the
surrounding area,” located in Howell, Michigan. Gould Electronics, Inc. v. Livingston Cty. Rd.
Cmm’n, No. 09-12633, 2012 WL 5817937, at *1 (E.D. Mich. May 25, 2012). One parcel is owned
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by LCRC (the “LCRC Property”); the other is owned by a third party, but Gould is indisputably
responsible for liabilities arising from the property (the “Gould Property”). Id. Gould alleges that
LCRC shares responsibility for the contamination; LCRC contends that Gould is fully responsible.
Id.
On May 29, 2012, the parties stipulated to an order of dismissal without prejudice, in
accordance with a tolling agreement entered into by the parties on May 21, 2012 (the “Tolling
Agreement”). See Stip. Order of Dismissal, Ex. A to Am. Compl. (Dkt. 22-2). The Tolling
Agreement contained the following provisions relevant to the instant dispute:
3. NFA. Within 30 days following the Court’s entry of the
Stipulated Order of Dismissal Without Prejudice referred in the
preceding paragraph, LCRC shall both submit its no further action
request and accompanying materials to the MDEQ pursuant to MCL
§ 324.20114d and R299.5534 (the “NFA”) and simultaneously serve
copies of the NFA on Gould’s counsel. Gould shall have the right
to submit materials to the MDEQ in response to the NFA, and LCRC
shall not object to the fact that Gould has made a submission.
[. . .]
5. NEW CASE. If a New Case is filed, the current record, pleadings,
Joint Final Pretrial Order, discovery, expert reports, legal positions
of the parties, etc. in the Lawsuit shall be preserved as applicable
and binding in the New Case as they currently are in the Lawsuit.
The New Case shall proceed to trial on an expedited basis, with any
new discovery limited to data gathered regarding the soil and
groundwater contamination at issue and related analyses conducted
thereon after July 6, 2009.
6. PURPOSE. The purpose of this Agreement is to maintain and
preserve the status quo of the parties’ respective current legal
positions in the Lawsuit while allowing the regulatory process to
proceed with the MDEQ’s consideration of the NFA to be submitted
by LCRC. Neither party waives any arguments or positions it may
take in the future regarding the legal impact of any decision the
MDEQ makes regarding the NFA. All defenses based upon the
passage of time will be preserved, but only to the extent that they
would have been valid in the Lawsuit. The time from the dismissal
of the Lawsuit pursuant to this Agreement to the filing of the New
Case will not be counted in calculating the passage of any relevant
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statutes of limitations. The Parties’ agreement to dismissal of the
Lawsuit shall not prejudice, release, or waive any of the Parties’
respective claims or defenses, except as set forth specifically in this
Agreement. The Parties preserve their full and complete right to
pursue against each other the respective surviving claims existing as
of the time of dismissal of the Lawsuit pursuant to this Agreement,
and no provision of this Agreement is intended to impair or limit the
respective rights of Gould and LCRC against each other, except as
set forth specifically in this Agreement.
Tolling Agreement, Ex. B to Am. Compl., at 2-4 (Dkt. 22-3).
Gould initiated a new action, within the meaning of the Tolling Agreement, on April 11,
2017. LCRC sought to dismiss the action, arguing that it was time-barred; the Court denied
LCRC’s motion. Gould Electronics, Inc. v. Livingston Cty. Road Comm’n, No. 17-11130, 2018
WL 1035714 (E.D. Mich. Feb. 23, 2018). Gould then filed an amended complaint on March 9,
2018, where it alleges violations of the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. § 9607(a) (“CERCLA”); and Michigan’s Natural Resources and
Environmental Protection Act, Mich. Comp. Laws §§ 324.20126 and 324.20126a (“NREPA”);
and claims that it should be granted access to LCRC’s property to conduct reasonable response
activities. See generally Am. Compl. (Dkt. 22).
LCRC subsequently filed the instant motion, again seeking to dismiss Gould’s case.
II.
ANALYSIS
A. MOTION TO DISMISS
1. Standard of Review
LCRC has filed the instant motion as a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), or, alternatively, a motion for judgment on the pleadings pursuant to Federal
Rule 12(c). However, LCRC has not yet filed an answer in this case. This precludes the Court
from ruling on the motion pursuant to Federal Rule 12(c). See Wright & Miller, 5 Fed. Prac. &
Proc. § 1367 (“Similarly, the defendant may not move under Rule 12(c) prior to filing an answer.”);
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see also Signature Combs, Inc. v. U.S., 253 F. Supp. 2d 1028, 1030 (W.D. Tenn. 2003) (“A motion
for judgment on the pleadings may only be brought after the pleadings are closed. Fed R. Civ. P.
12(c). Pleadings are deemed ‘closed’ upon the filing of a complaint and answer . . . . Thus,
[defendant’s] motion was premature when filed.”). Accordingly, the Court will review the instant
motion pursuant to Rule 12(b)(6).
On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), “[t]he
defendant has the burden of showing that the plaintiff has failed to state a claim for relief.” Directv,
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citing Carver v. Bunch, 946 F.2d 451, 454-455
(6th Cir. 1991)), cert. denied, 552 U.S. 1311 (2008). To survive a Rule 12(b)(6) motion, the
plaintiff must allege sufficient facts to state a claim to relief above the speculative level, such that
it is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plausibility
standard requires courts to accept the alleged facts as true, even when their truth is doubtful, and
to make all reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009); Twombly, 550 U.S. at 555-556.
Evaluating a complaint’s plausibility is a “context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. Although a
complaint that offers no more than “labels and conclusions,” a “formulaic recitation of the
elements of a cause of action,” or “naked assertion[s]” devoid of “further factual enhancement”
will not suffice, id. at 678, it need not contain “detailed factual allegations,” Twombly, 550 U.S.
at 555; see also Erickson v. Pardus, 551 U.S. 89, 93 (2007) (“[S]pecific facts are not
necessary . . . .”). Rather, a complaint needs only enough facts to suggest that discovery may
reveal evidence of illegality, even if the likelihood of finding such evidence is remote. Twombly,
550 U.S. at 556.
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2. Michigan Department of Environmental Quality Affidavits
LCRC largely bases its motion off of two affidavits from the Michigan Department of
Environmental Quality (“MDEQ”) dated January 25, 2018. See Heidi Grether Aff., Ex. A to Def.
Mot. (Dkt. 26-2); Dennis Eagle Aff., Ex. B to Def. Mot. (Dkt. 26-3) (together, the “MDEQ
Affidavits”). Relying on these affidavits, LCRC states that “the Director of the MDEQ, vested
with the statutory authority to so declare, announced the Agency’s final determination that only
Plaintiff Gould, and specifically not the Defendant Road Commission, was responsible for the
TCE contamination[.]” Def. Mot. at 2-3. LCRC’s position is that the parties agreed, as evidenced
by the Tolling Agreement, that MDEQ would determine liability for the TCE contamination, and
MDEQ has now concluded that LCRC is not liable. See generally id. at 11-14. Gould argues that
the MDEQ did not make a liability determination and, at any rate, the MDEQ’s decision is not
binding on the parties. See generally Pl. Resp. at 3-5 (Dkt. 29).
Rule 12(b)(6) motions must typically be limited to consideration of the pleadings. Geiling
v. Wirt Fin. Servs., Inc., No. 14-11027, 2015 WL 1529866, at *4 (E.D. Mich. Mar. 31, 2015).
Although “documents that a defendant attaches to a motion to dismiss are considered part of the
pleadings if they are referred to in the plaintiff’s complaint and are central to her claim,” id.
(quoting Weiner v. Klais & Co., Inc., 108 F.3d 86, 88 (6th Cir. 1997)), the MDEQ Affidavits are
not referred to in Gould’s complaint in any way or attached to the pleading. The Court, therefore,
will not consider them in resolving the motion to dismiss.
This Court has the authority under Rule 12(d) to convert the motion to dismiss to a motion
for summary judgment, and thus consider matters outside of the pleadings. The Court declines to
do so. LCRC has not requested that the court convert the motion to one for summary judgment,
and Gould asks that the Court refrain from doing so before Gould has a full opportunity to conduct
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discovery, Pl. Resp. at 14. The parties vigorously dispute the significance and meaning of the
MDEQ Affidavits, and the Court believes that a full and complete record is necessary before
entering a summary judgment ruling.
The Court now addresses LCRC’s arguments regarding Gould’s claims, considering only
the allegations in the complaint.
3. CERCLA Claim
Gould’s first claim is brought pursuant to § 107 of the Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9607(a). LCRC argues
that this claim fails because it is based entirely on the passive migration of hazardous substances
from the Gould Property onto the LCRC Property, for which there can be no liability under
CERCLA. Def. Mot. at 19. The cases relied upon by LCRC are clear that passive migration cannot
constitute a “disposal” within the meaning of CERCLA. See Bob’s Beverage, Inc. v. Acme, Inc.,
264 F.3d 692, 697 (6th Cir. 2001); see also Lockheed Martin Corp. v. Goodyear Tire & Rubber
Co., 529 F. App’x 700, 705 (6th Cir. 2013) (“CERCLA imposes liability only on the owner of a
facility at which the hazardous substances were disposed of. And here, . . . the PCBs were released
from the Airdock’s siding and then spread 1,000 feet north into Haley’s Ditch. That type of passive
migration does not constitute a Disposal within the meaning of CERCLA.”) (internal quotations,
citations, and alterations omitted).
But here there is no indication that Gould believes LCRC to be liable because it owned or
operated a facility “at the time of disposal or treatment of any hazardous substance,” 42 U.S.C. §
9607(a)(2). Instead, Gould alleges that LCRC is liable as “the owner and operator of a . . . facility,”
id. § 9607(a)(1). See Am. Compl. ¶ 6 (“LCRC is a Michigan road commission . . . which owns
and operates a facility located at 918 North Street, Howell, Michigan (the ‘LCRC Property’).”).
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LCRC does not explain how passive migration bears on liability for a current owner and operator.
See ABB Indus. Sys., Inc. v. Prime Tech., Inc., 120 F.3d 351, 358 (2d Cir. 1997) (“[C]urrent
owners are liable if, inter alia, there has been a ‘release’ of hazardous substances. Unlike the
definition of disposal, release is defined to include ‘leaching,’ which is commonly used to describe
passive migration.”) (internal citations omitted).
Gould alleges that a release has occurred on the LCRC Property.1 Am. Compl. ¶ 32 (“The
LCRC Property has released hazardous substances, including TCE, and other contaminants to
neighboring properties.”). Accordingly, LCRC has not shown that Gould has failed to state a claim
under CERCLA.
4. NREPA Claim
Count Two of the Amended Complaint alleges violations of Michigan’s Natural Resources
and Environmental Protection Act (“NREPA”), Mich. Comp. Laws §§ 324.101 et seq. LCRC puts
forth two arguments as to why Gould’s NREPA claim must fail: (1) under Michigan Compiled
Laws § 324.20129, Gould cannot bring a contribution claim unless it has been sued under Part 201
of NREPA, and Gould never has been; and (2) MDEQ has determined that LCRC is not a liable
party under Section 20125 of NREPA, and therefore the contribution claim under Michigan
Compiled Laws § 324.20129 fails.
As for the first argument, LCRC is correct that section 324.20129(3) states, “[a] person
may seek contribution from any other person who is liable under section 20126 during or following
a civil action brought under this part. This subsection does not diminish the right of a person to
LCRC argues that “MDEQ has conclusively determined that no releases of chlorinated solvents
occurred on the LCRC property,” Def. Mot. at 14, but “[a] motion to dismiss for failure to state a
claim is a test of the plaintiff’s cause of action as stated in the complaint, not a challenge to the
plaintiff’s factual allegations,” Golden v. City of Columbus, 404 F.3d 950, 958-959 (6th Cir. 2005)
(emphasis added).
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bring an action for contribution in the absence of a civil action by the state under this part.” In
Wacker Chem. Corp. v. Bayer Cropscience, Inc., No. 05-72207, 2006 WL 2404502, at *5 (E.D.
Mich. Aug. 18, 2006), the court explained that “[t]he statute is not ambiguous. The first sentence
requires that a person seeking contribution may only do so during or following litigation under
Part 201. The second section clarifies that the suit referenced in the first sentence need not have
been brought by the state: it could have been brought by a private party.”
Gould does not contest that it has never been sued under Part 201. Instead, it says that
LCRC “mistakenly argues” that it is pursuing a contribution claim under section 324.20129, when
its claim is for cost recovery pursuant to section 324.20126a. Pl. Resp. at 20. Gould argues that
it may bring a cost-recovery action even in the absence of a prior lawsuit against it. In United
States v. Atl. Research Corp., 551 U.S. 128, 139 (2007), the Supreme Court held that a private
party “may recover under § 107(a) [of CERCLA] without any establishment of liability to a third
party[;]” Michigan courts have acknowledged that “MCL 324.20126a is modeled after § 107(a) of
the CERCLA” and “federal authority concerning CERCLA is instructive in light of the similar
purposes of the NREPA and the CERCLA,” Hicks Family Ltd. Partnership v. 1st Nat. Bank of
Howell, No. 276575, 2008 WL 2744333, at *2-*3 (Mich. Ct. App. July 15, 2008).
In its reply brief, LCRC argues that regardless of which section Gould bases its claim upon,
a “necessary element” of a contribution claim and a cost-recovery claim is that LCRC must be a
liable party, and “MDEQ has conclusively determined that LCRC is in fact not liable for the
chlorinated solvent plume.” Def. Reply at 6 (Dkt. 30). However, as the Court has explained, it
will not consider the MDEQ Affidavits at this stage of the proceedings. The Amended Complaint
alleges that LCRC is in fact liable for response costs associated with the contamination, as
“[h]azardous substances, including TCE, and other contaminants, including salt contaminants,
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have been released from the LCRC Property onto neighboring properties.” Am. Compl. ¶ 45.
Accordingly, LCRC has not shown that Gould fails to state a cost-recovery claim on this basis.
LCRC’s second argument also relies on the MDEQ Affidavits. LCRC originally argued
that it is not liable for a contribution claim; after Gould responded that it was in fact asserting a
cost-recovery claim, LCRC said in its reply that Gould does not have a viable cost-recovery claim
“because MDEQ has conclusively determined that LCRC is in fact not liable for the chlorinated
solvent plume.” Def. Reply at 6. Such a determination is denied by Gould and is not alleged
anywhere in the amended complaint. LCRC’s argument that the amended complaint fails to state
a claim on this basis also fails.
5. Salt Contamination
Finally, LCRC argues that Gould’s allegations regarding salt contamination are barred by
the doctrine of laches, as Gould has shown a lack of diligence in asserting claims based on salt.
Def. Mot. at 23-24. LCRC contends that, in the eight years since Gould filed its original complaint,
Gould had not once suggested that it had a claim against LCRC based on salt, and LCRC would
be prejudiced by the introduction of such claims at this stage of the proceeding. Id. at 24. Gould
responds that salt and TCE “are inextricably tied together” and that it has “long been undisputed”
that LCRC is solely responsible for salt contamination on the LCRC Property. Pl. Resp. at 22-23.
The Court declines to rule, at this stage, that salt contamination is not a part of this case.
The Court will convene a conference to discuss the next steps in this case, including the framing
of issues for adjudication. As part of that process, the Court will address the salt issue.
B. MOTION FOR APPOINTMENT OF INDEPENDENT EXPERT
Gould asks the Court to appoint an independent expert witness pursuant to Federal Rule of
Evidence 706. The Rule provides, in relevant part:
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On a party’s motion or on its own, the court may order the parties to
show cause why expert witnesses should not be appointed and may
ask the parties to submit nominations. The court may appoint any
expert that the parties agree on and any of its own choosing. But the
court may only appoint someone who consents to act.
Fed. R. Evid. 706(a). Gould argues that an independent expert witness would assist the Court in
evaluating the relevance, reliability, admissibility, and weight to be given to the evidence in this
case, which involves complex technical and scientific issues. Pl. Mot. at 5. LCRC opposes the
motion, arguing that Gould has never before asked for the appointment of an independent expert
– including when the case was set to proceed to trial in 2012 – and that there is no need at this
point to bring in an expert who would be unfamiliar with the complex history of this case. Def.
Resp. at 2-4 (Dkt. 32).
The Court denies Gould’s request. “[T]he use of court-appointed experts is relatively
infrequent and most judges view the appointment of an expert as an extraordinary activity that is
appropriate only in rare circumstances.” Davis-Bey v. City of Warren, No. 16-11707, 2017 WL
1230509, at *3 (E.D. Mich. Apr. 4, 2017) (quoting Mikko v. Smock, No. 10-12845, 2012 WL
8963806, at *1 (E.D. Mich. Sept. 6, 2012)) (quotations omitted). The Court finds that the expense
and time commitment incurred by appointing an expert at this stage of the proceeding – after more
than nine and a half years of litigation – would far outweigh any benefit an independent expert
could provide. This is particularly so where the parties’ Joint Final Pretrial Order provides for the
parties’ own experts, whose testimony will be sharpened by our adversarial system. There is no
need for the extraordinary step of appointing an expert witness.
III.
CONCLUSION
For the reasons provided, Defendant Livingston County Road Commission’s motion to
dismiss (Dkt. 26) and Plaintiff Gould Electronic’s motion for appointment of an independent
expert (Dkt. 31) are denied.
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SO ORDERED.
Dated: March 1, 2019
Detroit, Michigan
s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served upon counsel of record and any
unrepresented parties via the Court's ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on March 1, 2019.
s/Kristen MacKay for Karri Sandusky
Case Manager
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