Barclay Lofts LLC v. PPG Industries Inc et al
Filing
350
DECISION AND ORDER signed by Magistrate Judge Nancy Joseph on 1/28/2025 denying 339 Motion to Amend/Correct; denying 341 Motion to Amend/Correct. (cc: all counsel)(llc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
BARCLAY LOFTS LLC,
Plaintiff,
v.
Case No. 20-CV-1694
PPG INDUSTRIES, INC. et al.,
Defendants.
DECISION AND ORDER ON BARCLAY’S AND SHERMAN’S RULE 59 MOTIONS
Barclay Lofts, LLC sued PPG Industries, Inc. and Hydrite Chemical Co. seeking the
recovery of response costs, damages, declaratory relief, and injunctive relief under the
Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”),
42 U.S.C. § 9601, et seq. and the Resources Conservation and Recovery Act (“RCRA”), 42
U.S.C. § 6901, et seq. PPG counterclaimed against Barclay and Sherman Associates, Inc. for
contribution and declaratory relief under CERCLA, and cross-claimed against Hydrite and
Lumimove for CERCLA contribution. Hydrite cross-claimed against PPG for CERCLA
contribution. A trial to the Court was held in this case from January 22, 2024 to February 2,
2024.
On September 18, 2024, the Court issued its decision and order following the Court
Trial, entering findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52. (Docket
# 333.) Barclay and Sherman now move to amend the findings of fact and conclusions of law
pursuant to Fed. R. Civ. P. 59(a)(2) and (e). (Docket # 339; Docket # 341.) For the reasons
further explained below, the motions are denied.
LEGAL STANDARD
Barclay and Sherman cite Fed. R. Civ. P. 59(a)(2) and 59(e) in support of their
motions. Rule 59(a)(2) applies to a motion for a new trial: “[a]fter a nonjury trial, the court
may, on motion for a new trial, open the judgment if one has been entered, take additional
testimony, amend findings of fact and conclusions of law or make new ones, and direct the
entry of a new judgment.” Whereas Rule 59(e) states that “[a] motion to alter or amend a
judgment must be filed no later than 28 days after the entry of the judgment.” Neither Barclay
nor Sherman requests a new trial in this matter; thus, I will consider both motions under Fed.
R. Civ. P. 59(e).
Rule 59(e) allows a party to move the court for reconsideration of a judgment within
28 days following the entry of the judgment. A motion for reconsideration serves a very
limited purpose in federal civil litigation; it should be used only “to correct manifest errors of
law or fact or to present newly discovered evidence.” Rothwell Cotton Co. v. Rosenthal & Co.,
827 F.2d 246, 251 (7th Cir. 1987) (quoting Keene Corp. v. Int’l Fidelity Ins. Co., 561 F. Supp.
656 (N.D. Ill. 1982), aff’d 736 F.2d 388 (7th Cir. 1984)). “A ‘manifest error’ is not
demonstrated by the disappointment of the losing party. It is the ‘wholesale disregard,
misapplication, or failure to recognize controlling precedent.’” Oto v. Metropolitan Life Ins. Co.,
224 F.3d 601, 606 (7th Cir. 2000) (quoting Sedrak v. Callahan, 987 F. Supp. 1063, 1069 (N.D.
Ill. 1997)). Apart from manifest errors of law, “reconsideration is not for rehashing previously
rejected arguments.” Caisse Nationale de Credit Agricole v. CBI Industries, Inc., 90 F.3d 1264, 1270
(7th Cir. 1996). Whether to grant a motion for reconsideration “is left to the discretion of the
district court.” Id.
2
ANALYSIS
Barclay and Sherman each challenge two aspects of the judgment. Barclay argues it
should not be liable for 100% of its past response costs and that it met its burden of proof
under RCRA. (Docket # 342.) Sherman argues that the Court wrongly determined it was an
“operator” under CERCLA and that even if it was an “operator,” its allocation of
responsibility for future response costs should be 0%. (Docket # 340.) I will address each
argument in turn.
1.
Barclay’s Rule 59 Motion
Again, Barclay challenges the Court’s determinations that it was 100% responsible for
its past response costs and that it failed to meet its burden of proof on its RCRA claim.
1.1
Past Response Costs
Barclay sued PPG for cost recovery under § 107(a) of CERCLA. PPG, in turn, brought
a CERCLA contribution claim against Barclay. I found that Barclay met its burden of proving
its § 107(a) claim against PPG and determined that it incurred $1,167,755.35 in necessary
response costs consistent with the National Contingency Plan. (Docket # 333 at 18–35.) In
considering PPG’s contribution counterclaim under § 113(f), I allocated 100% of the past
response costs, totaling $1,167,755.35, to Barclay. (Id. at 40–42.) In so finding, I concluded
that Barclay had already been fully compensated for its past response costs through the
reduction it received in the purchase price of the Properties and from the settlement payments
it had already received. (Id.)
Allocation of liability is based on the application of equitable factors, commonly
referred to as the “Gore Factors.” Env’t Transp. Sys., Inc. v. ENSCO, Inc., 969 F.2d 503, 507
(7th Cir. 1992). However, the “Gore Factors” are not exhaustive and “in any given case, a
3
court may consider several factors, a few factors, or only one determining factor . . .
depending on the totality of circumstances presented to the court.” Id. at 509. In the decision,
I found that because Barclay had not yet incurred costs for remediating the Properties, the
Gore Factors were not entirely helpful in allocating costs here. (Docket # 333 at 40.) I
considered that Barclay received a significant price reduction when purchasing the Properties
(in the amount of $1.5 million) and that the evidence showed that the price reduction was
directly related to the scope of contamination. (Id. at 40–41.)
The crux of Barclay’s reconsideration argument is that allocating 100% of past costs
to Barclay is inequitable because the future response costs are estimated in the range of
$6,700,000 to $24,000,000. (Docket # 342 at 3–4.) Thus, any concern regarding a double
recovery to Barclay is unfounded because there is no evidence that Barclay will ever be able
to sell the Properties for a profit. (Id. at 4.) Barclay further argues that considering the Hydrite
settlement payment is also error because the $550,000.00 Barclay received is allocated to
many different past costs, including those the Court found unrecoverable under CERCLA,
such as attorneys’ fees. (Id. at 4–5.)
Barclay has not shown a manifest error of law or fact. Barclay argues the Court relied
on the “unproven assumption” that it will one day be able to sell the Properties in question
for a profit. (Docket # 342 at 4.) This is inaccurate. In allocating past costs, I did not speculate
as to what costs may or may not be incurred in the future. Nor should I, as future response
costs, not yet incurred, are not recoverable under CERCLA. (Docket # 333 at 44, quoting
Santa Clarita Valley Water Agency v. Whittaker Corp., 99 F.4th 458, 483 (9th Cir. 2024).) Nor
did I consider whether Barclay will eventually be able to sell the Properties for a profit. Rather,
I considered the fact that of the past costs Barclay already incurred that were recoverable
4
under CERCLA, it had already recovered an amount exceeding those costs through the
substantial discount it received on the Properties and the settlement funds. Barclay does not
contend that either of these factors are legally improper to consider in the equitable allocation.
That Barclay disagrees with the analysis is not a basis to alter the judgment. Thus, Barclay’s
motion to alter the judgment as to the allocation of past costs is denied.
1.2
RCRA Claim
Barclay also brought an endangerment action under RCRA, 42 U.S.C. § 6972(a)(1)(B),
against PPG. To succeed on a RCRA claim, a plaintiff must show that: (1) the defendant has
generated solid or hazardous waste; (2) the defendant is contributing to or has contributed to
the handling of this waste; and (3) this waste may present an imminent and substantial danger
to health or the environment. Liebhart v. SPX Corp., 917 F.3d 952, 958 (7th Cir. 2019). PPG
argued that Barclay failed to meet its burden of proof as to the third element of its RCRA
claim, i.e., that the contaminants present an imminent and substantial danger to health or the
environment. I determined that based on the evidence presented at trial, Barclay failed to meet
its burden of proving imminent and substantial endangerment. (Docket # 333 at 72.) In so
finding, I considered that despite the undisputed evidence that contaminants at unsafe levels
are present on the Properties, Barclay offered only speculation as to the immediate risk to
human health and/or the environment. (Id. at 73.) I found that the evidence adduced at trial
showed the potential risk of harm to future occupants of the buildings, and even that risk
remained undetermined. (Id.)
Barclay argues that its RCRA claim was denied because it failed to provide activitybased sampling. (Docket # 342 at 7–8.) This is inaccurate. I found that to the extent Barclay
provided evidence of harm to human health, the risk of harm was to future occupants of the
5
Properties. And even at that, Curtis Hedman, a toxicologist and risk assessor for the
Wisconsin Department of Health Services, testified that they had not finished assessing the
risk. Thus, I concluded that even the risk to future occupants remains undetermined. (Docket
# 333 at 73.) There was no finding that activity-based sampling was required to succeed on
the RCRA claim. Barclay also reiterates its argument that people continue to trespass on the
Properties despite its security efforts. (Docket # 342 at 10–11.) But this argument was already
raised and rejected in the decision. (Docket # 333 at 74.) Reconsideration is not the
appropriate place to rehash previously rejected arguments. See Caisse Nationale de Credit
Agricole, 90 F.3d at 1270. While Barclay disagrees with my conclusion that it failed to meet
its burden of proof on the RCRA claim, it has not shown a manifest error of law or fact.
Reconsideration is not warranted under Rule 59(e) on either the allocation of past costs or on
the RCRA claim. Barclay’s motion is denied.
2.
Sherman’s Rule 59 Motion
Sherman argues that the Court wrongly determined it was an “operator” under
CERCLA and that even if it was an “operator,” its allocation of responsibility for future
response costs should be 0%.
2.1
Whether Sherman is an Operator Under CERCLA
PPG filed a third-party complaint against Sherman for both contribution under
CERCLA § 113(f)(1) and for a declaratory judgment finding Sherman jointly and severally
liable for response costs. To seek contribution from Sherman, PPG had to show that Sherman
was a potentially responsible party. The question before me was whether Sherman was
considered an “operator” under CERCLA. An “operator” under CERCLA must “manage,
direct or conduct operations specifically related to pollution, that is, operations having to do
6
with ‘the leakage or disposal of hazardous waste, or decisions about compliance with
environmental regulations.’” N. States Power Co. v. City of Ashland, Wis., 131 F. Supp. 3d 802,
823 (W.D. Wis. 2015) (quoting United States v. Bestfoods, 524 U.S. 51, 66–67 (1998)). I
determined, based on the evidence adduced at trial, that Sherman met the definition of
“operator” under CERCLA and was a potentially responsible party. (Docket # 333 at 38–39.)
Sherman’s reconsideration arguments, however, merely rehash arguments previously
raised and rejected at trial. Sherman disagrees with my conclusion that Sherman made
decisions about compliance with environmental regulations for the Properties and the
evidence cited in support of that conclusion. Sherman argues that “to impose direct operator
liability on Sherman,” the Court must find that “Sherman was acting in its own capacity and
not as an agent of Barclay.” (Docket # 340 at 4.) But that is precisely what I determined. I
considered that the legal invoices for response costs Barclay now claims were billed to
Sherman; Key Engineering directed its report findings to Sherman; and that the WDNR and
the City of Milwaukee’s Health Department directed their correspondences to Sherman,
amongst other evidence. (Docket # 333 at 39.) While Sherman disagrees with that analysis
and conclusion, it fails to show a manifest error of law or fact. Reconsideration is not
warranted on this ground.
2.2
Allocation of Future Response Costs to Sherman
Finally, Sherman argues that even assuming it is an operator, the Court improperly
grouped Barclay together with Sherman when allocating future response costs. (Docket # 340
at 5–7.) As stated above, contribution under CERCLA § 113(f)(1) directs courts to allocate
costs between responsible parties using equitable factors. In allocating liability for future
response costs, I allocated 10% liability to Barclay and Sherman. (Docket # 333 at 64–65.)
7
Sherman argues that it took no actions beyond serving as Barclay’s agent. Thus, it
would be inequitable to allocate any share of liability to Sherman. This is inaccurate. When
a party is found liable under CERCLA, the party is jointly and severally liable for all the
response costs, regardless of relative fault. (Docket # 333 at 36, citing United States v. Cap. Tax
Corp., 545 F.3d 525, 534 (7th Cir. 2008).) Furthermore, contrary to Sherman’s assertion, I did
not find Barclay and Sherman to be alter egos, as expressly stated in the decision. (Id. at 40.)
And while Sherman contends that I failed to conduct any equitable analysis to justify the
allocation decision (Docket # 348 at 6), I specifically considered the evidence presented at
trial that Barclay had no employees and no bank account of its own. (Docket # 333 at 39.) A
liable party’s financial resources is a proper factor to consider when allocating liability.
(Docket # 333 at 38, citing United States v. Davis, 31 F. Supp. 2d 45, 63 (D.R.I. 1998), aff’d,
261 F.3d 1 (1st Cir. 2001).)
The evidence demonstrates that Sherman is the pocketbook for both companies. It is
unclear how CERCLA’s purposes will be realized by allocating liability to a party with no
money when in reality, Sherman is responsible for paying all of the bills. (Id. at 39.) Sherman
argues that the Court “must clarify the statements in the Order regarding Barclay’s and
Sherman’s respective liability for future costs going forward to avoid confusion.” (Docket #
340 at 7.) It is unclear how there will be confusion moving forward. Whether Barclay or
Sherman incurs the costs, the evidence shows that Sherman pays the bill.
Again, while Sherman disagrees with my allocation analysis, it fails to show a manifest
error of fact or law. Reconsideration is not warranted under Rule 59(e). Sherman’s motion is
denied.
8
ORDER
NOW, THEREFORE, IT IS ORDERED that Sherman Associates’ Motion to Alter
Judgment (Docket # 339) and Barclay’s Motion to Alter Judgment (Docket # 341) are
DENIED.
Dated at Milwaukee, Wisconsin this 28th day of January, 2025.
BY THE COURT:
___________________________
____________
________________
NANCY JOSEPH
United States Magistrate Judge
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?