Axel Johnson, Incorporated v. Carroll Carolina Oil Company, Incorporated

191 F.3d 409, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20084, 49 ERC (BNA) 1270, 1999 U.S. App. LEXIS 22094
CourtCourt of Appeals for the Fourth Circuit
DecidedSeptember 14, 1999
Docket99-1041
StatusPublished

This text of 191 F.3d 409 (Axel Johnson, Incorporated v. Carroll Carolina Oil Company, Incorporated) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Axel Johnson, Incorporated v. Carroll Carolina Oil Company, Incorporated, 191 F.3d 409, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20084, 49 ERC (BNA) 1270, 1999 U.S. App. LEXIS 22094 (4th Cir. 1999).

Opinion

191 F.3d 409 (4th Cir. 1999)

AXEL JOHNSON, INCORPORATED, Plaintiff-Appellant,
v.
CARROLL CAROLINA OIL COMPANY, INCORPORATED; LINDA A. CARROLL, Defendants-Appellees,
and
CHARLES S. LANIER, Trustee; PACE OIL COMPANY, INCORPORATED, Defendants.
UNITED STATES OF AMERICA, Amicus Curiae.

No. 99-1041

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

Argued: June 8, 1999
Decided: September 14, 1999

[Copyrighted Material Omitted]

COUNSEL ARGUED: Kenneth Berlin, Sr., SKADDEN, ARPS, SLATE, MEAGHER & FLOM, L.L.P., Washington, D.C., for Appellant. Matthew Patrick McGuire, HUNTON & WILLIAMS, Raleigh, North Carolina, for Appellees. Ronald Mark Spritzer, Appellate Section, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus Curiae. ON BRIEF: Don J. Frost, Jr., SKADDEN, ARPS, SLATE, MEAGHER & FLOM, L.L.P., Washington, D.C., for Appellant. Craig A. Bromby, HUNTON & WILLIAMS, Raleigh, North Carolina, for Appellees. Lois J. Schiffer, Assistant Attorney General, Robert L. Klarquist, Lori Jonas, R. Justin Smith, Appellate Section, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Joseph Freedman, Office of the General Counsel, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Washington, D.C., for Amicus Curiae.

Before MURNAGHAN, LUTTIG, and MOTZ, Circuit Judges.

Affirmed by published opinion. Judge Motz wrote the opinion, in which Judge Murnaghan and Judge Luttig joined.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

This appeal concerns the cleanup of lead and other hazardous substances at the Old ATC Refinery Site pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C.A. §§ 9601-9675 (West 1995). Axel Johnson, Incorporated, a former owner and operator of the Refinery property, incurred and expects to incur substantial expenses in connection with the cleanup. Seeking relief from these expenses, Axel brought this cost recovery and contribution action against Carroll Carolina Oil Company, Incorporated (CCO), the current owner of the property, and Linda A. Carroll, who sold the property to CCO. We affirm the district court's grant of summary judgment to Carroll and CCO on Axel's cost recovery claims because we agree with the district court that Axel, as a potentially responsible person under CERCLA, cannot assert such claims. We do not address the district court's rulings on the contribution claims because they have been rendered moot by the entry of a consent decree resolving the liability of Carroll and CCO to the United States.

I.

Axel or its predecessors in interest operated the Refinery property, which is located in Wilmington, North Carolina on the banks of the Cape Fear River, from 1972 through 1984. During most of this twelve-year period, Axel leased the property from Pace Oil Co. under a contract providing that Axel bore responsibility for maintenance of the property, including disposal of any hazardous waste generated there. (Although it is occasionally awkward, we use"property" rather than "site" as shorthand for the Old ATC Refinery Site because "site" appears in CERCLA's definition of "facility," an important term in this case.)

Axel operated the property as a petroleum refinery from 1972 to 1981, and as a petroleum bulk storage facility from 1981 to 1984. The property covers thirteen acres and contains approximately fifteen storage tanks, an extensive network of pipelines connecting the tanks, and several other structures used in Axel's operations. During the first three years that it operated the property, from 1972 to 1975, Axel produced leaded gasoline there by blending tetraethyl lead with gasoline. Lead is a hazardous substance subject to cleanup under CERCLA. Id. § 9601(14)(D); 33 U.S.C.A. § 1317(a)(1) (West 1986); 40 C.F.R. § 401.15 (1999) (lead and compounds); 42 U.S.C.A. § 9602(a); 40 C.F.R. § 302.4 (1999) (tetraethyl lead and other substances identified as lead).

Axel buried wastes from its operations at various locations throughout the property, including at least three places where the EPA subsequently found elevated levels of lead in the soil. The EPA has also discovered that some of the piping that runs throughout the property is lead-contaminated. There is no evidence in the record of any subsequent party using or processing lead at the property.

When Axel ceased operations and left the property in 1984, it emptied some of the aboveground storage tanks that it had used in both its refinery and storage operations at the property. Any material remaining in the other tanks was either sold to the new operator of the property or subsequently transferred to another Axel-controlled facility. Axel strongly relies on the testimony of a former employee stating that Axel "stripped" some of the tanks prior to its departure, but that same employee swore in a declaration and testified when deposed that Axel did not clean any of the tanks before it left the property, explaining that "[s]tripping a tank is removing all useable product" while "[c]leaning a tank is once all of the liquid has been removed or all that can be removed from it, then a crew goes in and physically water washes the tank, scrubs it, scrapes it" (emphasis added). This employee also testified that Axel did not clean the pipelines before severing its ties with the property.

After Axel ceased operations in 1984, Republic Refining Company operated the property as a refinery and storage facility for thirteen months, from January 1985 to February 1986. Pace sold the property in February 1986 to Tracmark Inc. in return for a $6.5 million note, secured by a deed of trust on the property. City Gas & Transmission purchased the property from Tracmark in July 1987 by assuming the note. City Gas did not resume refinery or bulk storage operations, although it did perform other operations at the property until 1991. City Gas ultimately defaulted on the note; neither it nor Tracmark ever made any payments on the note to Pace. In the summer of 1994, Carroll acquired the note from Pace. Carroll foreclosed on the property in April 1996 and purchased it herself at the foreclosure sale. On April 24, 1996, Carroll sold the property to CCO, a company that she created and operated. Neither Carroll nor CCO have performed any operations at the property.

Beginning in 1991, the United States Coast Guard discovered spills and deposits of petroleum products, sludge, and other materials at the property. By 1995 the EPA had determined that the tanks, pipelines, and soils at various locations on the property were contaminated with hazardous substances, and had begun taking emergency action to remove such substances. In July 1996, Axel entered into an "administrative order by consent with EPA," refusing to acknowledge liability but agreeing to pay for and perform certain removal work at the property. In March 1997, the EPA found Axel's cleanup efforts deficient and accordingly took over the cleanup work.

Axel filed this action against Carroll, CCO, and the property trustee in August 1996.

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191 F.3d 409, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20084, 49 ERC (BNA) 1270, 1999 U.S. App. LEXIS 22094, Counsel Stack Legal Research, https://law.counselstack.com/opinion/axel-johnson-incorporated-v-carroll-carolina-oil-company-incorporated-ca4-1999.