UNITED STATES OF AMERICA v. SB BUILDING ASSOCIATES, LIMITED PARTNERSHIP et al

Filing 132

OPINION filed. Signed by Judge Anne E. Thompson on 6/16/2014. (eaj)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA,
Plaintiff,

Civ. No. 08-5298

v.
SB BUILDING ASSOCIATES, Limited
Partnership, et al.,

OPINION

Defendants.
THOMPSON, U.S.D.J.
This matter comes before the Court on the motion of Plaintiff the United States of
America to enforce a consent decree against Defendants SB Building GP, L.L.C., United States
Land Resources, L.P., and United States Realty Resources, Inc. 1 (hereinafter, “Defendants”),
(Doc. No. 110), and the cross-motion of Defendants to alter the judgment, (Doc. No. 118). The
Court has issued the Opinion below based upon the written submissions and oral argument held
on May 14, 2014. (Doc. Nos. 117, 119, 124, 130, 131). For the reasons set forth below, the
Court will grant Defendants’ motion, (Doc. No. 118), and will grant Plaintiff’s motion to the
extent that the Consent Decree will be enforced as modified, (Doc. No. 110).
BACKGROUND
The two motions before the Court stem from the cleanup and disposal of hazardous
material. In April 2004, the EPA notified Defendants that, under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq., they were
responsible for certain hazardous materials found on their property. (Doc. No. 117 at 2).

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Defendant S.B. Building Associates, L.P., which has filed for bankruptcy protection, is also party to the Consent
Decree. However, Plaintiff does not seek a judgment against S.B. Building Associates in this action. See United
States v. Nicolet, Inc., 857 F.2d 202, 207-08 (3d Cir. 1988).
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Defendants paid an environmental cleanup organization roughly $100,000 to remove these
materials. (Doc. No. 117 at 2). The removal was completed on April 13, 2005. (Id.).
After the cleanup, the EPA demanded payments for expenses it incurred in the cleanup
and for Defendants’ failure to comply with certain demands, such as a failure to provide proper
documentation. (Doc. No. 1 at 13). The parties negotiated a consent decree regarding these
costs, and the Court approved the Consent Decree on June 24, 2011. (Doc. No. 103).
The Consent Decree required Defendants to pay $300,000 plus three percent accrued
interest in six installments. (Doc. No. 103, Consent Decree at para. 5). The Decree also
contemplated penalties for late or non-payment. Under the terms of the Decree, if Defendants
failed to make any payment by its respective due date, Defendants would have to immediately
pay $350,000 and all of the accrued interest. (Id. at paras. 5, 9). The Decree also imposed
additional penalties for each day the payment was late and held Defendants jointly and severally
liable for any costs. 2 (Id. at para. 10).
Defendants made the first two payments on time. However, the third payment was 29
days late. (Doc. No. 110-1 at para. 7). Under the terms of the Consent Decree, this late payment
should have ended the payment plan and triggered an immediate obligation to pay the $350,000
and interest. (See Doc. No. 103). However, Defendants went on to make the fourth payment,
and it appears that the Government did not try to collect a penalty at this time. (See Doc. No.
110 at 2). 3 The fifth payment was 104 days late. On December 17, 2012, the sixth and final

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$750 per day for the first thirty days the payment was late, $1,000 per day for days 31 to 60, and $1,500 per day
from day 61 on. (Id. at para. 10).

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Plaintiff claims that the March 13, 2012 failure to pay could have been treated as the triggering event. (Id.).
However, in its motion, Plaintiff chose December 18, 2012 as the date from which it should calculate the penalty
and interest instead.
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payment of $43,832.86 became due. (Id. at 2). Defendants have not paid any amount toward the
sixth payment at this time. (Id.).
Based on the December 17, 2012 due date, Defendants would jointly and severally owe
$770,044 on the original return date of this motion. Defendants have moved for modification of
the judgment on the grounds that enforcement of the Decree after the operation of the penalty
provision would be inequitable.
DISCUSSION
“[B]y signing a consent decree, signatories make a ‘free, calculated and deliberate choice
to submit to an agreed upon decree rather than seek a more favorable litigated judgment.’”
Democratic Nat'l Comm. v. Republican Nat'l Comm., 673 F.3d 192, 201 (3d Cir. 2012)
(quotations omitted). Modification is not available “merely because it is no longer convenient
for a party to comply with the consent [decree].” Id. at 202 (citations omitted). However,
“Federal Rules of Civil Procedure 60(b)(5) and (6) authorize a Court to relieve the signatory
from a consent decree when ‘applying it prospectively is no longer equitable,’ or for ‘any other
reason that justifies relief.’” United States v. Alsol Corp., CIV.A. 09-3026 JLL, 2014 WL
1891352 (D.N.J. May 9, 2014). A party seeking such relief must demonstrate why enforcement
of the consent decree would be inequitable. Fed.R.Civ.P. 60(b) (5)-(6).
1. Federal Rule of Civil Procedure 60 (b)(5)
A court can modify a consent decree under Federal Rule of Civil Procedure 60(b)(5) if
“applying it prospectively is no longer equitable . . . .” Fed.R.Civ.P. 60(b)(5). “[A] party
seeking modification of a consent decree bears the burden of establishing that a significant
change in circumstances warrants revision of the decree.” Rufo v. Inmates of Suffolk Cnty. Jail,
502 U.S. 367, 383 (1992). The Supreme Court has noted that a party, generally, must show at

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least one of the following by a preponderance of the evidence: “(1) a significant change in
factual conditions; (2) a significant change in law; (3) that ‘[the] decree proves to be unworkable
because of unforeseen obstacles'; or (4) that ‘enforcement of the decree without modification
would be detrimental to the public interest.’” Democratic Nat'l Comm., 673 F.3d at 202 (citing
Rufo, 502 U.S. at 383. However, the Third Circuit has held that the Supreme Court’s ruling only
“provides a general interpretation of Rule 60(b)(5);” “it does not provide a ‘universal formula’
for deciding when applying a decree prospectively is no longer equitable.” Id.
Therefore, when deciding whether to vacate or modify a consent decree, a court should
also “respond to the specific set of circumstances before it by considering factors unique to the
conditions of the case.” Id. (citing Bldg. & Const. Trades Council of Philadelphia & Vicinity,
AFL-CIO v. N.L.R.B., 64 F.3d 880, 888 (3d Cir. 1995)). Examples of additional factors include:
(1) the circumstances leading to the entry of the decree; (2) the nature of the conduct the decree
sought to prevent; (3) the length of time since entry of the decree; (4) whether the party subject
to the decree's terms has attempted to comply in good faith with it; and (5) the likelihood that the
conduct or conditions the decree sought to prevent will recur absent the decree. Id. “In
weighing these factors, ‘the court must balance the hardship to the party subject to the injunction
against the benefits to be obtained from maintaining the injunction’ and the court should also
‘determine whether the objective of the decree has been achieved.’” Id.
Here, Plaintiff contends that a $770,044 judgment in response to the failure to make a
payment of $43,832.86 would be “overwhelming” and that the Consent Decree “should be
modified . . . because of SB’s deteriorated financial position and the public interest in seeing the
Site redeveloped.” (Doc. No. 117 at 7).

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First, Defendants claim that the change in factual circumstances makes the decree
unreasonable. The first change is the bankruptcy of S.B. Building Associates, a party to the
Consent Decree. However, Defendants do not show the extent to which the bankruptcy of this
one entity affects Defendants’ ability to pay as a whole. Defendants also show that they have
incurred expenses due to costly state court litigation concerning development of the Site,
decreasing their ability to satisfy this judgment. (Id. at 6). While litigation may have imposed a
financial burden, Defendants supplied insufficient evidence that the costs of this litigation alone
cause a “significant” change in factual circumstances. See United States v. Alsol Corp., CIV.A.
09-3026 JLL, 2014 WL 1891352 (D.N.J. May 9, 2014) (requiring proof of a “significant”
change).
Next, Defendants also claim that enforcement of the Consent Decree is detrimental to the
public interest. Defendants argue that the public has an interest in seeing this property
redeveloped and that a heavy fee will prevent the re-development of this property. However, the
public also has a strong interest in the “vigorous enforcement” of consent decrees, New Jersey
Dept. of Envtl. Prot. V. Gloucester Envtl. Mgmt. Servs. Inc., No. 84-01952, 2005 WL 1129763,
*13 (D.N.J. May 11, 2005), and in the finality of judgments, Bldg. & Const. Trades Council of
Philadelphia & Vicinity, AFL-CIO v. N.L.R.B., 64 F.3d 880, 888 (3d Cir. 1995).
Defendants also contend that the specific circumstances of this case justify modification.
First, Defendants argue that the circumstances leading to the entry of the decree and the nature of
the conduct punished by the decree do not merit such a high penalty. The original fines stem
primarily from a failure to pay cleanup associated costs and provide proper documentation, not
from Defendants’ own acts of pollution or failure to clean up the hazard. Defendants removed
and disposed of the hazardous material in 2005, (Doc. No. 117 at 6), and Defendants submitted

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documentation that the property was cleaned pursuant to the Consent Decree. Similarly,
Defendants claim that modifying this decree will not encourage Defendants to engage in future
environmental violations. Bldg. & Const. Trades Council of Philadelphia & Vicinity, AFL-CIO,
64 F.3d at 888 (likelihood that conduct consent decree sought to prevent will recur is
significant). The penalties were imposed primarily due to improper documentation, late
payment, and the monitoring costs of the cleanup and had only a slight “retributive objective.”
Compare (Doc. Nos. 1, 103) with (United States v. Alsol Corp., CIV.A. 09-3026 JLL, 2014 WL
1891352 (D.N.J. May 9, 2014) (finding retributive objective of consent decree designed to
punish defendants for refusing to provide EPA access to the site significant). In this case,
Defendants have already cleared the property of the hazard that spurred the litigation, and the
imposition of additional penalties will not lead to any improvements on that property. Finally,
the record shows that the amount owed under the Consent Decree increased rapidly over a short
period of time. Defendants made five of the six required payments. However, Defendants’
obligation under the Consent Decree increased from $43,832.86 to $770,044.00 within less than
sixteen months after they failed to make the final payment.
The record shows that the specific circumstances of this case call for modification of the
consent decree. The public and the EPA, in particular, have a strong interest in the finality of
judgments and the enforcement of consent decrees. However, the enforcement of the
$770,044.00 judgment in response to a failure to pay $43,832.86 will impose a burden on
Defendants that outweighs the benefits of enforcing this specific judgment. For the reasons set
forth above, the Court will grant Defendants’ motion for modification of the Consent Decree.
After a moving party has established that the circumstances warrant modification, “the
district court should determine whether the proposed modification is suitably tailored to the

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changed circumstance.” Rufo, 502 U.S. at 391, 112 S. Ct. 748. “A court should not try to
modify a consent order except to make those revisions that equity requires, given the change in
circumstances.” Democratic Nat. Comm., 673 F.3d at 203. After considering the circumstances
of this case and the revisions required by equity, the Court finds that the amount due under the
Consent Decree will be $125,000.
2. Enforcement of the Consent Decree
Plaintiff moves the Court to enforce the Consent Decree on the grounds that Defendants
have failed to pay as required by the Consent Decree. There is no dispute that Defendants have
failed to pay the amount demanded under the Consent Decree in time.
Therefore, the Consent Decree will be enforced with the modification that Defendants
owe $125,000.
CONCLUSION
For the reasons set forth above, Defendants’ motion to modify will be granted, and
Plaintiff’s motion will be granted to the extent that the modified Consent Decree will be
enforced.

/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.
Dated: 6/16/14

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