RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 United States v. Consolidation No. 02-3308 ELECTRONIC CITATION: 2003 FED App. 0346P (6th Cir.) Coal Co., et al.
File Name: 03a0346p.06
Before: DAUGHTREY and GILMAN, Circuit Judges;
CALDWELL, District Judge.* UNITED STATES COURT OF APPEALS
_________________
FOR THE SIXTH CIRCUIT
_________________ COUNSEL
UNITED STATES OF AMERICA , X ARGUED: Neil G. Epstein, ECKERT, SEAMANS, Plaintiff, - CHERIN & MELLOTT, Philadelphia, Pennsylvania, for - Appellant. Daniel M. Darragh, BUCHANAN INGERSOLL v. PROFESSIONAL CORPORATION, Pitts burgh , - No. 02-3308 - Pennsylvania, for Appellees. ON BRIEF: Neil G. Epstein, CONSOLIDATION COAL CO .; > Carol L. Press, ECKERT, SEAMANS, CHERIN & ,
TRIANGLE WIRE & CABLE , MELLOTT, Philadelphia, Pennsylvania, Richard S.
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INC., Wiedman, ECKERT, SEAMANS, CHERIN & MELLOTT, -
Third-Party - Pittsburgh, Pennsylvania, for Appellant. Daniel M. Darragh, B U C H A N A N I N G E R S O LL P R O F E S S I O N AL Plaintiffs-Appellees, - CORPORATION, Pittsburgh, Pennsylvania, Joseph D.
- Lonardo, VORYS, SATER, SEYMOUR & PEASE, -
NEVILLE CHEMICAL CO ., Washington, D.C., for Appellees.
-
Third-Party -
Defendant-Appellant. N _________________ OPINION
Appeal from the United States District Court _________________ for the Southern District of Ohio at Columbus. Nos. 94-00785; 94-00248—George C. Smith, MARTHA CRAIG DAUGHTREY, Circuit Judge. Third-
District Judge. party defendant Neville Chemical Company appeals a district court decision holding it liable for a portion of the past and Argued: July 30, 2003 future costs of cleanup at the Buckeye Reclamation Landfill in Belmont County, Ohio. The landfill has been on the Decided and Filed: September 26, 2003 National Priorities List as a Superfund site since 1983. Third-
party plaintiffs Consolidation Coal Company (referred to throughout the record as Consol) and Triangle Wire & Cable,
*
The Honorable Karen Caldwell, United States District Judge for the Eastern District of Kentucky, sitting by designation.
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Inc., brought an action under § 113 of the Comprehensive Neville Chemical’s share was calculated to be 4.78%. Third, Environmental Response, Compensation, and Liability Act of the landfill contains municipal waste, between 755,000 and 1980, as amended by the Superfund Amendments and 955,000 tons of which were disposed of at the landfill from Reauthorization Act of 1986 (CERCLA), 42 U.S.C. §§ 9601 1970 to 1991. All three types of waste contain hazardous et seq., seeking a declaration of liability and equitable substances and contribute to the current need for cleanup. allocation of response costs to Neville Chemical. Although the chemical company stipulated that it had deposited After investigation by the Ohio Environmental Protection 472,000 gallons of wastewater sludge from its Pennsylvania Agency (OEPA) and the United States Environmental treatment plant in the landfill between December 1978 and Protection Agency (USEPA), the USEPA placed the landfill February 1979, Neville Chemical claims that the district court on the list of Superfund sites in September 1983. In was unreasonable in imposing any of the cleanup costs on it December 1984, the USEPA notified a number of companies because the wastewater caused no harm. The district court that it considered them potentially responsible parties (PRPs) found Neville Chemical liable under CERCLA and and requested that the companies conduct a remedial determined its equitable share of past and future response investigation and feasibility study. Neville Chemical declined costs for cleanup of the landfill to be 6%. See United States to participate, but the other companies worked with the v. Consolidation Coal Co., 184 F. Supp. 2d 723, 752 (S.D. USEPA to develop an administrative consent order that Ohio 2002). required a remedial investigation and feasibility study, as well as an endangerment assessment. After evaluating the results For the reasons set out below, we affirm the district court’s of the remedial investigation and feasibility study, the decision as to liability and equitable share based on the USEPA selected construction of a solid waste landfill cap as reasoning in the district court opinion. However, as to the the appropriate remedy, at a cost of $48 million to $52 district court’s calculation of prejudgment interest, awarded million. When the USEPA notified non-participating PRPs to Consol and Triangle Wire under 42 U.S.C. § 9607(a), we of their potential liability, a number of them began to find it necessary to remand the case for further proceedings. participate in the remediation process that resulted in a second administrative consent order. Neville Chemical again I. FACTUAL AND PROCEDURAL BACKGROUND declined to participate. The record indicates that three different kinds of waste were In 1994, Consol filed a complaint for declaratory judgment, deposited at the Buckeye Reclamation Landfill over the last in part to determine liability and allocation of costs under seven decades. First, the landfill contains “gob,” material left CERCLA, and the United States filed a complaint for the over from coal mining operations in the area from 1934 to recovery of costs. The cases were consolidated and realigned 1954 and composed of coal, rock, clay, and other geological so that the sole plaintiff in both cases was the United States. materials. The “gob” was left on the property before the area Ten of the defendant PRPs filed a third-party complaint for was a landfill. Second, the landfill contains industrial waste, contribution against 64 third-party defendants, including which was disposed of primarily in a small area known as the Neville Chemical. During this time, the USEPA and the “waste pit.” The parties have stipulated the weight, type, and cooperating PRPs, including Consol and Triangle Wire, relative amount of the 45,000 tons of industrial waste that continued to negotiate modifications to the remediation plan. various entities deposited at the landfill from 1972 to 1980.
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Although invited to do so by the court, Neville Chemical once is clearly erroneous where, although there is evidence to again declined to participate. support that finding, ‘the reviewing court on the entire evidence is left with the definite and firm conviction that a As a result of the negotiations, the USEPA modified its mistake has been committed.’” Id., quoting United States v. decision as to the chosen remediation for the site. The cost of United States Gypsum Co., 333 U.S. 364, 395 (1948). the revised plan was estimated at $25 million, about one-half of the cost of the original plan. In March 1998, the court III. ANALYSIS entered a consent decree between the United States and the cooperating PRPs providing for performance of the selected A. Liability and Equitable Allocation remediation at the landfill site. Consol, acting individually and on behalf of a number of other cooperating PRPs, and The district court found that Neville Chemical was liable as Triangle Wire continued to pursue their third-party action a responsible party after articulating the purpose of CERCLA, against Neville, seeking contribution under CERCLA’s § 113. i.e., facilitating prompt cleanup of hazardous waste sites financed by those responsible for the hazardous waste, and After a long and detailed analysis, the district court based on the relevant statutory sections governing liability, ultimately ruled for Consol and Triangle Wire, determining §§ 107(a) and 113 (f)(1), 42 U.S.C. §§ 9607(a) and that Neville Chemical was responsible for 6% of the past and 9613(f)(1). Under those provisions, a party is liable in a future response cost of the Buckeye Reclamation Landfill. contribution claim under § 113(f)(1) if it was liable or Neville appeals both the finding of liability and the allocation potentially liable under § 107(a). The court found Neville of a 6% equitable share. Chemical liable to Consol and Triangle Wire under the § 113 claim because all four elements necessary for § 107(a)
II. STANDARD OF REVIEW liability were met: (1) the Buckeye Reclamation Landfill is a “facility” within the meaning of CERCLA; (2) a release of A district court’s allocation of response costs in a CERCLA hazardous substance occurred there; (3) the release caused contribution will not be set aside in the absence of a finding Consol and Triangle Wire to incur response costs; and that the district court abused its discretion. See United States (4) Neville Chemical falls into one of the four categories of v. R.W. Meyer, Inc., 932 F.2d 568, 573 (6th Cir. 1991). “An PRPs listed in § 107(a). See Kalamazoo River Study Group abuse of discretion is found where we are left with v. Menasha Corp., 228 F.3d 648, 653 (6th Cir. 2000). The the‘definite and firm conviction that the trial court committed district court did not abuse its discretion in finding Neville a clear error of judgment.’” Kalamazoo River Study Group v. Chemical liable and, in fact, nowhere in its briefs does the Rockwell Int’l Corp., 274 F.3d 1043, 1047 (6th Cir. 2001) chemical company contest the district court’s conclusion of (quoting Logan v. Dayton Hudson Corp., 865 F.2d 789, 790 law that it meets all four elements of liability articulated in (6th Cir. 1989). Kalamazoo River Study Group and §107(a).
In addition, we set aside factual findings underlying the The district court next recognized the broad discretion it district court’s allocation of response costs only if such had in making CERCLA contribution allocations using “such findings are clearly erroneous. Kalamazoo River Study Group equitable factors as the court determines are appropriate.” 42 v. Rockwell Int’l Corp., 274 F.3d at 1047. “A factual finding U.S.C. § 9613(f)(1). It discussed commonly used equitable
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factors, including the six so-called “Gore factors” considered of culpability, and two of the “Gore factors,” the amount of by Congress in enacting the law and the four “critical factors” waste and cooperation with the government, after carefully identified by Judge Torre in United States v. Davis, 31 F. explaining why other factors were not helpful in deciding this Supp.2d 45, 63 (D.R.I. 1998), aff’d, 261 F.3d 1 (1st Cir. particular case. 2001).1 Neither of these lists is intended to be exhaustive or exclusive, and “in any given case, a court may consider The court determined the equitable allocation across the several factors, a few factors, or only one determining factor four groups in the following way. First, the court assigned . . . depending on the totality of the circumstances presented the industrial generators and transporters, including Neville to the court.” See Environmental Trans. Sys., Inc. v. ENSCO, Chemical, an equitable share of 60% of past and future costs, Inc., 969 F.2d 503, 509 (7th Cir. 1992). finding they were the most culpable. Their culpability arose from the fact that they knew or should have known, of the Although both Consol and Neville Chemical argued that hazardous substances present in their waste, yet they disposed the district court had to determine only Neville Chemical’s of their waste without seeking the permission required by the equitable share, and not the share of any other PRP, the Belmont County Board of Commissioners. Second, the court district court rejected that argument, reasoning that a fair and assigned the owners and operators of the landfill a 25% equitable allocation could only be achieved by comparing equitable share of the response costs based on their lesser Neville’s role as a PRP to other PRPs. The district court then culpability, but also on their irresponsibility in not doing divided the PRPs into four categories: generators and more to prevent the disposal of industrial wastes. Third, the transporters of industrial waste; owners and operators of the court assigned Consol as generator of the “gob” a 10% landfill; Consol as the generator of the gob; and generators equitable share, finding that Consol had knowledge that it and transporters of the municipal solid waste. In allocating contained hazardous substances, but recognizing at the same response costs, the district court focused primarily on the time that the material was deposited at the site between 1934 second “critical factor” from Davis, the PRP’s varying levels and 1952, at a time when there was nothing to prohibit such disposal. Finally, the court assigned the generators and transporters of municipal solid waste a 5% equitable share, 1 See, e.g., Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., because the group had little or no knowledge that the waste 153 F.3d 344 , 354 (6th C ir. 1998) ((stating that “§ 113 's equitable contained hazardous substances and because they were allocation provision allows the court to allocate costs equitably among required to dispose of the waste at the landfill by rule of the PRPs considering the so-called ‘G ore F actors’”); United States v. Belmont County Board of Commissioners. Hercu les, Inc., 247 F.3d 706, 718 (8th Cir. 200 1) (recognizing tha t in making an equitable allocation of liability, “courts generally take into Within the 60% equitable share assigned to the industrial account the so-called ‘G ore factors’”); United States v. Colorado & Eastern R.R. Co., 50 F.3d 1 53 0, 15 36 n. 5 (10 th Cir. 1995 ). See also generators and transporters, the court used percentage weight Robert P. Dahlquist, Ma king Se nse of Su perfund Alloca tion De cisions: of the waste as a fair and equitable way of determining The Rough Justice of Negotiated and Litigated Allocations, 31 Envtl. L. individual shares. The parties stipulated that Neville Rep. 110 98, 1 109 9 (2001 ) (“The G ore factors are mo st relevant in Chemical was responsible for 4.78% of the industrial waste acad emic and theoretical analysis of the wa y Superfund liabilities sho uld by percentage weight. The court rounded Neville’s 4.78% be allocated. But in the real world Judge Torre’s list of four critical factors often provides the basis upon which Superfund allocations are share up to 5% based on the fact that Neville did not seek made.”). prior written approval of the Belmont County Board of
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Commissioners, as the county regulations required it to do. based on conditions similar to those that existed in the waste Triangle Wire is the only industrial generator which did seek pit. prior approval, and the court found that this fact made that company marginally less culpable than its percentage weight Neville Chemical also argues that the district court abused would reflect. By rounding up Neville Chemical’s individual its direction in allocating 60% of the response costs to the share and decreasing Triangle Wire’s share, the district court industrial generators and 5% that share to Neville Chemical. adjusted for Neville Chemical’s violation of applicable local Finally, the company argues that the district court abused its regulation and Triangle Wire’s compliance. Thus, at this discretion in doubling Neville Chemical’s share from 3% to point in the court’s analysis, Neville Chemical had an 6%. However, all these arguments boil down to a individual share of 5% of 60%, or 3%, of the past and future disagreement with the particular equitable factors the district response costs. court chose to use and how the court applied them. After an independent review, we conclude that nothing in Neville’s The court considered one additional equitable factor in its arguments leads us to a “definite and firm conviction that the analysis: cooperation with the government. The court trial court committed a clear error of judgment.” Kalamazoo concluded that Neville Chemical did not cooperate with the River Study Group v. Rockwell Int’l Corp., 274 F.3d at 1047. OEPA or the USEPA and that it did not participate in any efforts of the other PRPs to work with the government to B. Prejudgment Interest investigate the site, design a remedy, abide by the remedy. In sum, the district court found that “Neville did not We do, however, conclude that the district court failed to meaningfully cooperate in any phase of the CERCLA process comply with a statutory requirement in awarding prejudgment in this case, although it was given ample opportunity to do interest to Consol and Triangle Wire. The court calculated so.” Because of this “persistent, pervasive, and unjustified” the award at $298,750, based on past response costs lack of cooperation when Neville Chemical knew or should beginning in 1986, which is apparently when such costs were have known that its sludge had been deposited at the site, the first incurred at the site. court doubled the company’s share of response costs from 3% to 6%. The court also noted that because the cooperating An award of prejudgment interest is provided for in PRPs had negotiated a remedy that was half the cost of the CERCLA § 107(a), 42 U.S.C. § 9607(a), and is mandatory. originally approved remedy, doubling Neville Chemical’s See United States v. Township of Brighton, 153 F.3d 307, 321 individual share would avoid the possibility of a windfall to (6th Cir. 1998) (finding prejudgment interest is mandatary in that company, based on the successful efforts of the a § 107 action); Allied Signal, Inc. v. Amcast Int’l Corp., 177 cooperating PRPs to find a less costly solution. F. Supp. 2d 7813, 757-58 (S.D. Ohio 2001) (reasoning that prejudgment interest must be awarded to a party seeking Neville Chemical argues on appeal that the district court contribution under § 113(f) in the same manner that it would abused its discretion in this allocation of chemical costs, be awarded to a party bringing a cost recovery action under given the opinion of Neville Chemical’s expert that the § 107(a), because an action under § 113(f) is governed by the company’s waste caused no harm. However, the district court requirements of § 107(a)). The statute specifies exactly when found the opinion of the expert unreliable because it was not it begins to accrue, that being “the later of (i) the date payment of a specified amount is demanded in writing, or
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(ii) the date of the expenditure concerned.” 42 U.S.C. Commercial Corp. v. Mosher Steel of Kansas, Inc., 100 F.3d § 9607(a). 792, 801 (10th Cir. 1996); In re Bell Petroleum Servs., Inc., 3 F.3d 89, 908 (5th Cir. 1993), we cannot say that the Hence, as applied to this case, the statute requires that complaint in this case satisfies the statutory prerequisite for interest be calculated from the later of two dates: the date on an award of prejudgment interest, because it is not sufficiently which Neville Chemical’s payment of a specific amount was specific. demanded in writing or the date on which the expenditure occurred. The district court appears to have calculated the We therefore conclude that the district court erred as a prejudgment interest based solely on when the expenditure matter of law in calculating the amount of prejudgment actually occurred, without regard to the statute’s directive that interest owed by Neville Chemical without making a finding it be based on the later occurring of the two dates. Although regarding when the statutory prerequisites to prejudgment Consol and Triangle Wire began incurring response costs in interest were met. It follows that the calculation of 1986, there is no evidence, nor did the district court make a prejudgment interest contained in the judgment cannot be finding, as to when they made a written demand for a sustained in the absence of a further determination under specified sum from Neville Chemical. § 107(a).
Consol and Triangle Wire argue that a letter written on IV. CONCLUSION behalf of the Buckeye Reclamation Landfill Steering Committee on February 21, 1986, constituted a written For the foregoing reasons, we AFFIRM the judgment of the “demand letter.” However, to call this letter a “demand district court as to Neville Chemical Company’s liability and letter” for a specified sum is a clear mischaracterization of the its individual share of past and future response costs, based on document, because the letter simply invited Neville Chemical our holding that the district court did not abuse its discretion to join the group of cooperating PRPs to participate in the in equitably allocating those costs. investigation of the landfill and informed the chemical company of the time and place of the group’s next meeting. We further VACATE the award of prejudgment interest The district court did not refer to this letter in awarding and REMAND the case to the district court for a recalculation prejudgment interest, and we decline to rely on it as a basis of the prejudgment-interest award consistent with this for the award. opinion.
In the alternative, Consol argues that the third-party complaint constitutes the written demand of a specified sum because it alleged that the cost of the remedy was over $47 million. But this third-party complaint was brought against 59 third-party defendants, as well as various unidentified parties, and did nothing to specify the amount being demanded from each of the third-party defendants. Although other circuits have found that a complaint can meet the statutory written demand requirement, see Bancamerica