Principal Mutual Life Insurance v. Western Resources, Inc.

963 F. Supp. 1071, 27 Envtl. L. Rep. (Envtl. Law Inst.) 21316, 45 ERC (BNA) 1595, 1997 U.S. Dist. LEXIS 6158, 1997 WL 219904
CourtDistrict Court, D. Kansas
DecidedApril 30, 1997
DocketCivil Action No. 96-2506-GTV
StatusPublished

This text of 963 F. Supp. 1071 (Principal Mutual Life Insurance v. Western Resources, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Principal Mutual Life Insurance v. Western Resources, Inc., 963 F. Supp. 1071, 27 Envtl. L. Rep. (Envtl. Law Inst.) 21316, 45 ERC (BNA) 1595, 1997 U.S. Dist. LEXIS 6158, 1997 WL 219904 (D. Kan. 1997).

Opinion

MEMORANDUM AND ORDER

VAN BEBBER, Chief Judge.

Plaintiff brings this action seeking a declaratory judgment that it is exempt from liability under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., for environmental contamination on a parcel of land in Hutchinson, Kansas. The case is pursuant to Fed.R.Civ.P. 12(b)(1). [1072]*1072For the reasons set forth below, the motion is granted.

I. Background1

Plaintiff and defendant are parties to a lease agreement covering a two-acre parcel of property in Hutchinson, Kansas. From approximately 1885 through 1918, the property had been the site of a manufactured gas plant. Defendant purchased the property in 1935. In August 1961, through a financing mechanism often referred to as a “sale/leasebaek” transaction, plaintiff bought the property from defendant and, simultaneously, leased the property back to defendant under a lease agreement.

In the early 1990s, the Kansas Department of Health and Environment (“KDHE”) began inspecting the land for evidence of environmental contamination. Shortly thereafter, defendant entered into a consent decree with the KDHE in which it agreed to initiate a remedial investigation and feasibility study of the property. As part of the decree, the KDHE also ordered defendant to provide the • agency with the names of all parties potentially responsible for remediation of the land. On March 31, 1994, defendant notified plaintiff that, as the record owner of the property, plaintiff would be identified to the KDHE as a potentially responsible party (“PRP”). The KDHE officially informed plaintiff of its PRP status in a December 20, 1995 correspondence.

At the beginning of 1995, defendant contacted plaintiff and offered to purchase the Hutchinson property. During the course of those discussions, defendant speculated on the possible cost of cleaning up the site and plaintiffs potential liability. Plaintiff later rejected the proposed sale, but did request that the parties meet in order to discuss cleanup goals.

On January 5,1996, defendant wrote to the KDHE informing the department that it had been talking with other PRPs in an attempt to obtain their assistance in remediating the site. Twelve days later, defendant invited plaintiff to participate in a meeting to discuss the status of the Hutchinson property. Defendant insists, and plaintiff does not dispute, that the invitation “followed the customary courtesy among PRPs of notifying all PRPs identified by the environmental authority of a PRP meeting.” (Def.’s Mot. at 3).

In March 1996, plaintiff and defendant held a telephone conference call and exchanged a series of letters in which the parties quarreled over indemnification issues under the lease agreement and plaintiffs potential liability for any cleanup costs. After the parties were unable to work out their differences, plaintiff commenced this action seeking a declaration that it is not liable for past or future costs incurred by defendant in remediating the Hutchinson property. Defendant now moves to dismiss the case on the grounds that no justiciable controversy has been presented.

II. Discussion

Plaintiff brings this lawsuit pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201. This statute provides:

In a case of actual controversy within its jurisdiction, any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

28 U.S.C. § 2201(a) (emphasis added). The distinction between a “controversy” in the article III sense and a mere abstract question of law is often quite blurred, and it would be impossible to fashion a precise test for determining in every instance the presence of such a controversy. Kunkel v. Continental Cas. Co., 866 F.2d 1269, 1274 (10th Cir.l989)(citing Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941)). The basic question to be asked, however, is whether [1073]*1073there is a “substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Maryland Cas. Co., 312 U.S. at 273, 61 S.Ct. at 512. The requisite controversy must be definite and concrete, admitting a specific relief through a conclusive decree, as distinguished from an opinion advising what the law would be under a hypothetical statement of facts. ANR Pipeline Co. v. Corporation Comm’n, 860 F.2d 1571, 1577 (10th Cir.1988)(citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617 (1937)).

Furthermore, even when an “actual controversy” exists in the constitutional sense, courts have broad discretion in deciding whether the action is appropriate for a declaratory judgment. See Wilton v. Seven Falls Co., 515 U.S. 277, —, 115 S.Ct. 2137, 2143, 132 L.Ed.2d 214 (1995); Alabama State Fed’n of Labor v. McAdory, 325 U.S. 450, 462, 65 S.Ct. 1384, 1390, 89 L.Ed. 1725 (1945). “The Declaratory Judgment Act [is] an authorization, not a command. It [gives] the federal courts competence to make a declaration of rights; it [does] not impose a duty to do so.” Public Affairs Assoc., Inc. v. Rickover, 369 U.S. 111, 112, 82 S.Ct. 580, 581-82, 7 L.Ed.2d 604 (1962). Thus, the normal principle that federal courts should adjudicate claims within their jurisdiction is subordinated in the declaratory judgment context “to considerations of practicality and wise judicial administration.” Wilton, 515 U.S. at —, 115 S.Ct. at 2143.

Although the Tenth Circuit has not discussed the justiciability of actions seeking a declaration of nonliability under CERCLA, a number of other circuits have. In Certain Underwriters at Lloyd’s v. St. Joe Minerals Corp., 90 F.3d 671 (2d Cir.1996), for example, the Environmental Protection Agency (“EPA”) discovered toxic contamination at multiple locations on which the defendant conducted lead and zinc mining operations. The EPA then designated the defendant a PRP under CERCLA.

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963 F. Supp. 1071, 27 Envtl. L. Rep. (Envtl. Law Inst.) 21316, 45 ERC (BNA) 1595, 1997 U.S. Dist. LEXIS 6158, 1997 WL 219904, Counsel Stack Legal Research, https://law.counselstack.com/opinion/principal-mutual-life-insurance-v-western-resources-inc-ksd-1997.