Farmland Industries, Inc. v. Colorado & Eastern Railroad

944 F. Supp. 1492, 148 A.L.R. Fed. 723, 43 ERC (BNA) 2039, 1996 U.S. Dist. LEXIS 16787
District Court, D. Colorado·Decided November 6, 1996·No. Civil Action 89-B-1786·Published·Cited by 6 cases

Opinion

FINDINGS OF FACT, CONCLUSIONS OF LAW, & ORDER

BABCOCK, District Judge.

A one-day trial to the court was held on October 28, 1996. Having heard testimony and reviewed the exhibits and the memoran-da of law submitted by the parties, I make the following findings of facts and conclusions of law and order the entry of judgment.

FINDINGS OF FACT

A.

A pesticide formulation plant, originally owned by Woodbury Chemical Company, was operated in Commerce City, Colorado, from the late 1950s until mid-1971. In 1965, a fire destroyed the main building of the Woodbury Chemical Company. Pesticide-ridden rubble from the fire contaminated the property. In 1966, a new building was constructed at the same location. A former subsidiary of Farmland Industries, Inc. (Farmland), Missouri Chemical Company, acquired the plant and the property in 1968. In August 1971, Missouri Chemical Company sold the property to McKesson Corporation (McKesson). Herein, the building constructed on the property will be called the “McKesson Building.”

In September 1983, the United States Environmental Protection Agency (EPA) determined that ongoing releases of hazardous substances were occurring and placed a 2.2 acre parcel adjacent to and east of the McKesson Building on the National Priorities List as the Woodbury Chemical Superfund Site (the ‘Woodbury Site” or “Site”). That parcel is about 600 feet east to west by 175 feet north to south. The EPA designated it Operable Unit 1. At that time, the 2.2 acre parcel was owned by Chicago, Rock Island and Pacific Railroad Company (CRIP).

On December 19, 1984, Colorado Eastern Railroad Company (CERC) purchased the CRIP 2.2 acres and another CRIP parcel of land adjacent to the listed Site on the west side (about 1,000 feet east to west; approximately 8-10 acres) (the CERC Parcels), and a shortline railroad track that runs along the northern edge of the Site (the CERC Railroad Tracks). A railroad spur ran from the CERC Railroad Tracks to provide rail service to the McKesson Building. From December 19,1984, until August 1,1989, CERC operated the CERC Railroad Tracks.

*1494 On August 26,1985, the EPA notified Gary W. Flanders (Flanders) of CERC’s potential liability for releases and threatened releases from the Woodbury Site. On September 22, 1986, the Site was expanded to include the westerly CERC Parcel and the McKesson Property. The EPA designated those parcels Operable Unit 2.

In October 1989, the United States filed suit against all known “PRPs,” including Farmland, McKesson and CERC. Farmland cross-claimed against CERC, Great Northern Transportation Company (GNTC), and Gary W. Flanders (collectively, the CERC Parties).

On September 4, 1990, the United States, Farmland and McKesson entered into a Partial Consent Decree, pursuant to which Farmland and McKesson Corporation were required to undertake remedial activities at the Woodbury Site and to reimburse the government $700,000 for response costs. By June 1992, Farmland and McKesson had completed all remediation at a cost in excess of $15 million, including $1,439,380.00 to remove certain soil and debris from the CERC Parcels. Farmland paid 51% of those costs.

A consent decree between the United States and CERC was entered by the Court on April 20, 1992. CERC agreed to pay $100,000.00 to the EPA This payment has not yet been made.

Judge Carrigan granted Farmland’s Motion for Partial Summary Judgment on the issue of the amount and reasonableness of the “additional” cleanup costs of $734,058.30 (.51 x $1,439,330.00) incurred by Farmland. United States v. Colorado & Eastern R.R., 832 F.Supp. 304, 306 (D.Colo.1993). In June 1993, after a two day trial, Judge Carrigan held that Farmland, as a matter of law, could recover its response costs against the CERC Parties, jointly and severally, under § 107(a), and entered judgment for Farmland and against the CERC Parties for $734,058.30 (which was later amended to include prejudgment interest of $27,060.00).

The CERC Parties appealed. Upon rehearing, the Tenth Circuit held, inter alia, that: (1) PRPs must proceed under § 113(f) (contribution), rather than § 107(a) (strict liability), against other PRPs for the recovery of response costs; and (2) the “matter addressed” in the CERC-EPA consent decree is the government’s past response costs, and such consent decree does not bar Farmland’s contribution claim against CERC. United States v. Colorado & Eastern R.R. Co., 50 F.3d 1530, 1539 (10th Cir.1995). The Tenth Circuit remanded the case to this court “to consider Farmland’s contribution claim under § 113(f) and to apply any equitable factors it determines appropriate.” Id. at 1539.

I granted in part, and denied in part, Farmland’s Motion for Partial Summary Judgment, holding that the CERC Parties are liable parties under CERCLA § 113(f), and, holding that the CERC Parties “were a cause of Farmland’s incurrence of increased response costs, the degree of which shall be determined at trial.” Farmland Industries, Inc. v. Colorado & Eastern R.R. Co., 922 F.Supp. 437, 442 (D.Colo.1996). Thus, the only issue remaining for trial is the allocation of the additional response costs. See CERC, 50 F.3d at 1539.

B.

Flanders was the sole shareholder of CERC from March 8, 1983, until May 29, 1987. On May 29, 1987, Mr. Flanders exchanged his shares of CERC for common stock of GNTC, thereby causing GNTC to become the 100% owner of CERC. Flanders was the sole shareholder of GNTC from July 2, 1986, until September 30, 1991. Evelyn J. Flanders, Flanders’ wife, is the current sole shareholder of GNTC. Evelyn J. Flanders is an officer and director of both GNTC and CERC.

Flanders has been an officer, director and shareholder of both CERC and GNTC. Flanders held the position of officer and director of both companies simultaneously at relevant times in the past. Flanders resigned as an officer and director of CERC and GNTC effective December 30, 1991. Flanders, GNTC and CERC (collectively, the “CERC Parties”) are owners and operators within the meaning of 42 U.S.C. § 9607. Findings of Fact, Conclusions of Law and Order for Judgment, p. 3, n. 3, June 9, 1993.

Free access — add to your briefcase to read the full text and ask questions with AI

Farmland Industries, Inc. v. Colorado & Eastern Railroad, 944 F. Supp. 1492, 148 A.L.R. Fed. 723, 43 ERC (BNA) 2039, 1996 U.S. Dist. LEXIS 16787 (D. Colo. 1996).

944 F. Supp. 1492 (Farmland Industries, Inc. v. Colorado & Eastern Railroad) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Trinity Industries Inc v. Greenlease Holding Co
903 F.3d 333 (Third Circuit, 2018)
Board of County Commissioners v. Brown Group Retail, Inc.
768 F. Supp. 2d 1092 (D. Colorado, 2011)
Grand Street Artists v. General Electric Co.
28 F. Supp. 2d 291 (D. New Jersey, 1998)
Gould, Inc. v. a & M Battery & Tire Service
987 F. Supp. 353 (M.D. Pennsylvania, 1997)
United States v. Kramer
953 F. Supp. 592 (D. New Jersey, 1997)