Bethany City of v. Rockwell Automation Inc et al

Filing 41

ORDER granting in part and denying in part 30 City of Bethany's Partial Motion to Dismiss Counterclaims. Count 1 of Defendants' Counterclaims dismissed without prejudice. Signed by Honorable Timothy D. DeGiusti on 9/1/2017. (mb)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
CITY OF BETHANY, OKLAHOMA,
Plaintiff,
vs.
ROCKWELL AUTOMATION, INC. and
GULFSTREAM AEROSPACE CORP.,
Defendants.

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Case No. CIV-16-1005-D

ORDER
Before the Court is Plaintiff City of Bethany’s Partial Motion to Dismiss
Defendants’ Counterclaims [Doc. No. 30], filed pursuant to Fed. R. Civ. P. 12(b)(6). 1
Plaintiff seeks a dismissal of counterclaims asserted by Defendants Rockwell Automation,
Inc. and Gulfstream Aerospace Corp. under Section 107(a) of the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C.
§§ 9601-9675, and the common law doctrine of unjust enrichment.

Defendants have

timely opposed the Motion, which is fully briefed. 2
Factual and Procedural Background
This case concerns the alleged contamination of soil and groundwater, and a threat
to Plaintiff’s public water supply wells, caused by aircraft manufacturing operations

1

Although no rule is cited in the Motion, Plaintiff relies on Rule 12(b)(6) in its supporting
Memorandum [Doc. No. 30-1].
2

In addition to Plaintiff’s opening brief [Doc. No. 30-1], the Court has considered
Defendants’ response brief [Doc. No. 33] and Plaintiff’s reply brief [Doc. No. 35].

conducted by Defendants’ predecessors on land adjacent to Wiley Post Airport owned by
the Oklahoma City Airport Trust (“OCAT”).

The contamination is the subject of

investigative and remedial work undertaken by OCAT and Defendants under supervision
of the Oklahoma Department of Environmental Quality (“DEQ”) pursuant to a
Memorandum of Agreement and Consent Order entered in October 2009 and amended in
July 2013, and further amended after this case was filed (the “Consent Order”).

The

investigation shows a migration of toxic substances toward one of the wellfields that
Plaintiff uses to supply water for residents, and Defendants and OCAT have now agreed to
do remedial work to minimize further migration.
Plaintiff filed this action in August 2016 to recover compensatory and punitive
damages under various state law theories, including common law torts and statutes that
protect municipal water supplies.

See Okla. Stat. tit. 11, §§ 37-115 & 37-116.

Plaintiff

alleged it had incurred numerous costs associated with responding to the contamination
and higher operating costs of its water system.

Plaintiff also asserted a claim under the

Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. §§ 6901-6981, to abate an
“imminent and substantial endangerment to health or the environment,” id.
§ 6972(a)(1)(B), and to obtain injunctive relief compelling Defendants to comply with
RCRA “by removing toxic chemicals . . . from soil and groundwater.”

See Compl. [Doc.

No. 1] at 25 (Prayer for Relief, ¶ b).
In response, Defendants moved to dismiss the RCRA claim, answered the
Complaint, and asserted four counterclaims.

Defendants bring two counterclaims under

CERCLA to obtain declaratory relief and to recover certain costs:
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Count I, seeks cost

recovery under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), for responding to an
alleged release of hazardous substances into the groundwater from Plaintiff’s sewer line;
and Count II, seeks contribution under Section 113(f) of CERCLA, 42 U.S.C. § 9613(f),
for Plaintiff’s share of costs incurred by Defendants in DEQ’s cleanup program.
Defendants also bring two counterclaims under state law:

Count III, for injunctive relief

to abate a public nuisance allegedly created by Plaintiff’s contamination of the
groundwater; and Count IV, to recover for unjust enrichment allegedly arising from
Defendants’ remediation of Plaintiff’s contamination.

Plaintiff moves to dismiss only

Defendants’ first and fourth counterclaims as legally insufficient.
Standard of Decision
“To survive a motion to dismiss [under Rule 12(b)(6)], a [pleading] must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 570 (2007)); see Robbins v. Oklahoma, 519 F. 3d 1242, 1247 (10th
Cir. 2008).

“A claim has facial plausibility when the [claimant] pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.”

Iqbal, 556 U.S. at 678.
Plaintiff’s Motion

Plaintiff does not question the sufficiency of Defendants’ factual allegations but
challenges the legal basis of the counterclaims.

Defendants’ § 107(a) CERCLA

counterclaim alleges that Plaintiff is a responsible party who is jointly and severally liable
for costs incurred in remediating the groundwater contamination.
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Plaintiff asserts that

this claim fails as a matter of law because Defendants have already agreed to resolve their
liability as a responsible party or potentially responsible party, and thus are limited under
CERCLA to a contribution claim for costs in excess of their equitable share.

Plaintiff

contends Defendants cannot pursue both a cost-recovery claim and a contribution claim.
Plaintiff asserts that Defendants’ unjust enrichment counterclaim fails as a matter
of law because Defendants admit they are liable for some of the contamination and thus
they do not have “clean hands,” referring to the equitable doctrine.

See Pl.’s Partial Mot.

Dismiss [Doc. No. 30] at 2; Pl.’s Mem Supp. [Doc. No. 30-1] at 8-9.

Further, Plaintiff

contends Defendants cannot bring an unjust enrichment claim because they have an
adequate remedy at law.
Discussion
A.

CERCLA Cost-Recovery Counterclaim
Plaintiff’s argument that Defendants are barred from bringing a cost-recovery

CERCLA claim is based on the statutory scheme, congressional purpose, and case law
interpreting the statute.

Section 107(a) authorizes a party who voluntarily undertakes a

cleanup for which it may be held liable (a potentially responsible party or PRP) to pursue
an action for recovery of response costs against another PRP.
Research Corp., 551 U.S. 128, 131 (2007).

See United States v. Atl.

Section 113(f) authorizes a party who is liable

or potentially liable under § 107(a), or who has resolved its liability in an administrative or
judicially approved settlement, to bring a claim for contribution against other PRP’s for
their share of the liability.

A question left open by the Supreme Court’s decision in

Atlantic Research is whether a PRP may bring a cost-recovery action under § 107(a) for
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costs incurred under a consent order.

Federal appellate courts considering the question

have held that only a contribution claim under § 113(f) is available.
has not addressed the issue.

The Tenth Circuit

Plaintiffs urges the Court to follow the weight of authority

and to dismiss Defendants’ § 107(a) claim.
While not conceding that the Tenth Circuit would join other courts, Defendants do
not challenge Plaintiff’s legal position but, instead, seek to distinguish their § 107(a) action.
Defendants contend they may pursue a claim under § 107(a) for costs incurred voluntarily,
before they entered into any agreement with DEQ or began work under the Consent Order.
The flaw in Defendants’ argument is that it ignores the factual allegations of their pleading.
Defendants claim that Plaintiff is responsible for a particular plume of chemical
substances that escaped from a break in Plaintiff’s sewer line and caused groundwater
contamination, and has migrated across OCAT’s property toward Plaintiff’s wellfield.
Defendants deny these chemicals were used in manufacturing operations on OCAT’s
property.

See Answer & Countercl. [Doc. No. 25], ¶¶ 41, 49.

Defendants allege the

sewer-based contamination was identified in 2013 during a comprehensive investigation
conducted after they became parties to the original Consent Order between OCAT and
DEQ.

Id. ¶¶ 37-44.

Defendants’ remedial work to protect Plaintiff’s wellfield from

contamination began in 2016 pursuant to the Consent Order.

Id. ¶ 51. The relief sought

by Defendants on their § 107(a) counterclaim includes damages for oversight costs paid to
DEQ under the Consent Order and future response costs incurred in continued investigative
and remedial work allegedly related to Plaintiff’s sewer, and a declaratory judgment
regarding future costs.

Id. ¶¶ 72-75.
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Thus, contrary to Defendants’ argument, their § 107(a) counterclaim is not based on
voluntary work undertaken before they became parties to the Consent Order, and does not
seek relief limited to those prior response costs.

Accordingly, even under Defendants’

view, their cost-recovery counterclaim as currently pled is barred by CERCLA and must
be dismissed.

To the extent Defendants could state a § 107(a) counterclaim based on

work outside the scope of the Consent Order, the dismissal should be without prejudice to
a future amendment within the deadline to be set by the scheduling order that will be
entered in this case.
B.

Unjust Enrichment Counterclaim
Plaintiff’s arguments for dismissal of Defendants’ common law claim of unjust

enrichment are based on the doctrine of unclean hands and the equitable nature of the claim.
Plaintiff first asserts that Defendants admit their culpability for the alleged contamination
in their Answer.

Defendants respond, correctly, that Plaintiff overlooks the factual

allegations on which their counterclaims are based; they deny any responsibility for the
chemicals allegedly released from Plaintiff’s sewer.

In any event, the Court agrees that

Plaintiff’s defense of unclean hands cannot be resolved as a matter of law on Defendants’
pleading.

As to Plaintiff’s additional assertion that the availability of a legal remedy

precludes an equitable claim, Defendants are correct that the Federal Rules of Civil
Procedure allow alternative statements of a claim, even if they are inconsistent.
R. Civ. P. 8(d)(2)-(3).

See Fed.

Therefore, the Court finds that Plaintiff is not entitled to dismissal

of Defendants’ unjust enrichment counterclaim.

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Conclusion
For these reasons, the Court finds that Defendants’ pleading fails to state a plausible
counterclaim for cost-recovery under § 107(a) of CERCLA but that it states a counterclaim
for unjust enrichment.
IT IS THEREFORE ORDERED that Plaintiff City of Bethany’s Partial Motion to
Dismiss Defendants’ Counterclaims [Doc. No. 30] is GRANTED in part and DENIED in
part, as set forth herein.

Count I of Defendants’ Counterclaims is DISMISSED without

prejudice.
IT IS SO ORDERED this 1st day of September, 2017.

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