United States Fidelity & Guaranty Co. v. United States

638 F. Supp. 1068, 17 Envtl. L. Rep. (Envtl. Law Inst.) 20261, 24 ERC (BNA) 1612, 1986 U.S. Dist. LEXIS 23225
CourtDistrict Court, M.D. Pennsylvania
DecidedJuly 3, 1986
DocketCiv. 84-1255
StatusPublished
Cited by2 cases

This text of 638 F. Supp. 1068 (United States Fidelity & Guaranty Co. v. United States) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fidelity & Guaranty Co. v. United States, 638 F. Supp. 1068, 17 Envtl. L. Rep. (Envtl. Law Inst.) 20261, 24 ERC (BNA) 1612, 1986 U.S. Dist. LEXIS 23225 (M.D. Pa. 1986).

Opinion

OPINION

MUIR, District Judge.

I. Introduction.

On September 20, 1984, the United States Fidelity & Guaranty Company (hereafter “U.S.F. & G.”) filed the complaint in this action against the United States of America seeking recovery pursuant to the Federal Tort Claims Act, 28 U.S.C. § 2671, et seq. Recovery was sought for losses which occurred as a result of a release of an acid cloud on March 23, 1982 during the clean-up of a tank containing hazardous chemical waste at the site of Drake Chemicals, Inc. in Lock Haven, Pennsylvania. On February 13, 1986, an amended complaint was filed adding a claim for $5,000 of personal injury losses which occurred as a result of another release of a sulphuric acid cloud from the same tank. On February 28,1986, the United States filed a motion to dismiss or for summary judgment based upon its assertion that the challenged acts of the Environmental Protection Agency (hereafter “EPA”) fall within the discretionary function exception to the Federal Tort Claims Act, 28 U.S.C. § 2671, et seq. By opinion dated April 16, 1986, this Court denied the motion, ruling that the discretionary function exception does not apply in this case.

The case was bifurcated for trial between the issues of liability and damages and the liability phase of the case was tried to the Court from June 2 through 6, 1986. The Court’s findings of fact, discussion, and conclusions of law as to liability follow.

II. Findings of Fact.

The parties submitted undisputed findings of fact which have been adopted by *1070 this Court. The letter “U” for “Undisputed” follows such findings.

1. Plaintiff, the United States Fidelity & Guaranty Company (hereinafter “U.S.F. & G.”) is a corporation engaged in the insurance business. (U)

2. The Defendant is the United States of America, acting through its Environmental Protection Agency (hereinafter “EPA”). (U)

3. At all times material to this action, U.S.F. & G. was the insurer of OH Materials Handling Company, a division of KBI, Inc. (hereinafter referred to as “OH Materials”), pursuant to a liability insurance policy issued by U.S.F. & G. to KBI, Inc. (U)

4. OH Materials, as relevant to this litigation, is engaged in the business of containing, abating, and cleaning up hazards posed by chemical waste. (U)

5. Drake Chemicals, Inc. is a corporation which operated a chemical manufacturing facility in Lock Haven, Pennsylvania, from 1961 to August, 1981. (U)

6. In or around August, 1981, Drake Chemicals, Inc. ceased operations and filed a petition in bankruptcy. (U)

7. At the time it discontinued its operations, Drake Chemicals abandoned its manufacturing site, leaving numerous chemicals, drums, and reaction vessels at the site (hereinafter referred to as “Drake site”). (U)

8. The Pennsylvania Department of Environmental Resources (hereinafter “Department of Environmental Resources”) inspected the Drake Chemicals site and determined that it posed a threat to the public health and the environment. (U)

9. On January 5, 1982, the Department of Environmental Resources ordered Drake Chemicals to clean up the Drake site. (U)

10. Drake Chemicals responded to the orders of the Department of Environmental Resources by advising that it lacked the financial resources to clean up the site. (U)

11. In February of 1982, the Department of Environmental Resources requested that EPA consider, the Drake site for emergency funding of a cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (hereinafter “the Act”), 42 U.S.C. § 9601 et seq. (U)

12. The Act is a federal program which provides authority to the federal government to clean up sites which it has determined pose an imminent threat of harm or endangerment to the public health and the environment. (U)

13. Cleanups under the Act of sites such as the Drake site are administered by EPA. (U)

14. The Act authorizes removal and remedial actions as responses to potential hazards. (U)

15. “Removal” actions under the Act are relatively short-term responses and include “immediate” and “planned” removals. (U)

16. The Drake Chemicals site was considered by EPA for an immediate removal action under the Act. (U)

17. Immediate removal actions are undertaken only if a response is needed within hours or days to prevent or mitigate significant harm to human health or the environment and such actions will not otherwise be provided on a timely basis. (U)

18. Generally, immediate removal actions cannot continue for longer than 6 months or exceed $1,000,000 in costs unless a special exception is given by the Administrator of EPA. (U)

19. EPA’s participation in removal actions is controlled by an On Scene Coordinator. (U)

20. The On Scene Coordinator directs federal removal efforts financed by the Act and coordinates all other efforts at the scene of the removal activity. (U)

21. Federally funded removal actions are performed by independent contractors selected by the On Scene Coordinator from a list of contractors which EPA has determined have the resources and experience to carry out the removal. (U)

*1071 22. In February of 1982, the Department of Environmental Resources and EPA inspected the Drake site and observed over 3,000 drums, and various reactors and tanks, containing hazardous chemicals. (U)

23. Many of said drums, reactors and tanks were in a deteriorating condition. (U)

24. Previous investigations at the Drake site had revealed ground water contamination and poor air quality in the area.

25. After these investigations, the EPA, through its On Scene Coordinator, concluded that there existed at the Drake site an imminent threat of fire and explosion as well as a threat of direct public contact with hazardous chemicals, all of which constituted a severe threat to the public health. (U)

26. The City of Lock Haven, with a population of approximately 15,000, is situated immediately to the north, west, and northeast of the Drake site. (U)

27. Areas to the south, southeast, and east of the Drake site are sparsely populated.

28. The EPA’s On Scene Coordinator issued oral and written demands to the owners of Drake Chemicals, Inc. to clean up the site.

29. When the owners of Drake Chemicals refused to clean up the Drake site, the On Scene Coordinator requested approval from the EPA Office of Emergency and Remedial Response to undertake an immediate removal action. (U)

30.

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Bluebook (online)
638 F. Supp. 1068, 17 Envtl. L. Rep. (Envtl. Law Inst.) 20261, 24 ERC (BNA) 1612, 1986 U.S. Dist. LEXIS 23225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-united-states-pamd-1986.