Emergency Services Billing Corp. v. Allstate Insurance

668 F.3d 459, 42 Envtl. L. Rep. (Envtl. Law Inst.) 20037, 2012 WL 313578, 74 ERC (BNA) 1001, 2012 U.S. App. LEXIS 1972
CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 2, 2012
Docket11-2381
StatusPublished
Cited by43 cases

This text of 668 F.3d 459 (Emergency Services Billing Corp. v. Allstate Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Emergency Services Billing Corp. v. Allstate Insurance, 668 F.3d 459, 42 Envtl. L. Rep. (Envtl. Law Inst.) 20037, 2012 WL 313578, 74 ERC (BNA) 1001, 2012 U.S. App. LEXIS 1972 (7th Cir. 2012).

Opinion

FLAUM, Circuit Judge.

This appeal concerns the interpretation of the phrase “consumer product in consumer use” in the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). 42 U.S.C. § 9601 et seq. Plaintiff-appellant, Emergency Services Billing Corporation (“ESBC”), is the billing agent for the Volunteer Fire Department of Westville (“Fire Department”), a town in central Indiana. ESBC brought this action against individuals who were involved in motor vehicle accidents and the insurance companies that represent those individuals. Under CERCLA, the owner of a “facility” from which hazardous substances have been released is responsible for the response costs that result from the release. ESBC believes that personally-owned motor vehicles fall within the definition of “facilities” under CERCLA. Thus, ESBC charged the individual defendants, and therefore the insurance company defendants, with the response costs relating to their respective car accidents. Defendants argue that personal motor vehicles fall under CERCLA’s “consumer product in consumer use” exception to the definition of “facilities,” and they have refused to pay ESBC for the response costs. ESBC has asked for declaratory relief in the form of a confirmation of the defendants’ liability under CERCLA.

The district court held that motor vehicles for personal use do, in fact, fall under the “consumer product in consumer use” exception to CERCLA’s definition of facility, and that defendants cannot be charged with the Fire Department’s costs for responding to the car accidents. ESBC appeals, challenging the district court’s interpretation of CERCLA. For the following reasons, we affirm the district court’s dismissal of ESBC’s suit.

I. Background

The facts of this case are few and are not in dispute. This case involves response costs that the Fire Department incurred in responding to four separate motor vehicle accidents. Defendants David Penton, Juan Jose Gomez Hernandez, Frank Dubczak, and Michael Baker each owned a vehicle that was involved in a car accident in LaPorte County, Indiana. Defendants Dubczak and Penton are insured by Progressive Insurance Company, defendant Baker is insured by Allstate Insurance Company, and defendant Hernandez is insured by State Farm Insurance Company. Each insurance company is a defendant in this suit as well. ESBC, as billing agent for the Fire Department, determined that each of the individual defendants was the owner of a vehicle involved in a collision that the Fire Department responded to, and that each of the defendants had liability insurance coverage. ESBC therefore provided invoices itemizing the response costs incurred by the Fire Department for each collision. *463 The defendants, however, refused to pay those costs.

In response to defendants’ refusal to pay, ESBC brought this declaratory action, asking the court to affirm that defendants are liable for response costs under CERCLA. Defendants filed answers and denied liability. Allstate and Baker also filed counterclaims against ESBC seeking injunctive relief from ESBC’s billing practices and alleging claims for violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq., unjust enrichment, unlawful fee collection, fraud, constructive fraud, and insurance fraud.

State Farm eventually filed a motion for judgment on the pleadings according to Rule 12(c) of the Federal Rules of Civil Procedure. All defendants joined the motion. Defendanf/counter-plaintiff Allstate also filed a motion for a preliminary injunction regarding ESBC’s mailing of invoices and a motion for a hearing regarding the preliminary injunction. The district court granted defendants’ motion for judgment on the pleadings, rendering Allstate’s motions moot. In response to this ruling, ESBC filed a Rule 59(e) motion to alter or amend the judgment, which was denied.

For purposes of appellate jurisdiction, Allstate and Baker stipulated to the dismissal of their remaining counterclaims without prejudice. The district court construed that stipulation as a motion, and granted their motion to dismiss without prejudice. Given that all claims had therefore been dismissed, the court dismissed Allstate and Baker’s entire case without prejudice. ESBC appealed the district court’s judgment on the pleadings, but we questioned our jurisdiction over that ruling given the fact that the counterclaims were not dismissed with prejudice. ESBC therefore dismissed their appeal voluntarily and asked the district court for a Rule 54(b) entry of judgment, which would permit ESBC to appeal the court’s dismissal of its suit before Allstate’s countersuit was finally resolved. Fed.R.Civ.P. 54(b). The district court granted the Rule 54(b) motion, and the appeal is now properly before us.

II. Discussion

CERCLA was established by Congress to “provide for liability, compensation, cleanup, and emergency response for hazardous substances released into the environment and the cleanup of inactive hazardous waste disposal sites.” CERCLA, Pub.L. No. 96-510, 94 Stat. 2767 (1980). CERCLA imposes liability for “response costs” on the “owner and operator of a ... facility” from which a hazardous substance has been released. 42 U.S.C. § 9607(a)(1) — (4). See also Amcast Industrial Corp. v. Detrex Corp., 2 F.3d 746, 748 (7th Cir.1993). Responders to situations involving hazardous materials can therefore bring private cost-recovery actions against facility owners responsible for the release of hazardous materials. Id. In order to succeed in an action for recovery of response costs under CERCLA, a plaintiff must prove the following elements: “(1) the site in question is a ‘facility’ as defined by CERCLA; (2) the defendant is a ‘responsible person’ for the spill as defined by CERCLA; (3) there was a release of hazardous substances; and (4) such release caused the Plaintiff to incur response costs.” Envtl. Transp. Sys., Inc., v. ENSCO, Inc., 969 F.2d 503, 506 (7th Cir.1992). The only prong at issue in this appeal is the first prong: whether the motor vehicles at issue constitute “facilities” for the purposes of CERCLA liability. CERCLA defines “facility” as follows:

*464 42 U.S.C. § 9601(9) (emphasis added). Section 9601(9)(A) clearly contemplates that motor vehicles are facilities for the purposes of CERCLA. Section B, however, excludes “consumer produces] in consumer use” from the definition of facility. The question, therefore, is whether a motor vehicle owned for personal use is a “consumer product in consumer use” under CERCLA.

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668 F.3d 459, 42 Envtl. L. Rep. (Envtl. Law Inst.) 20037, 2012 WL 313578, 74 ERC (BNA) 1001, 2012 U.S. App. LEXIS 1972, Counsel Stack Legal Research, https://law.counselstack.com/opinion/emergency-services-billing-corp-v-allstate-insurance-ca7-2012.