United States v. Valentine

856 F. Supp. 627, 1994 U.S. Dist. LEXIS 8768, 1994 WL 288465
District Court, D. Wyoming·Decided June 2, 1994·No. 93CV1005J·Published·Cited by 9 cases

Opinion

ORDER ON MOTION OF DEFENDANTS CONOCO PIPELINE COMPANY, EIGHTY-EIGHT OIL COMPANY, TRUE OIL COMPANY, PHILLIPS PETROLEUM COMPANY AND TEXACO REFINING AND MARKETING, INC. FOR LEAVE TO FILE CROSS CLAIMS AND THIRD PARTY COMPLAINTS

ALAN B. JOHNSON, Chief Judge.

This matter comes before the Court on the motion of defendants Conoco Pipeline Company, Eighty-Eight Oil Company, True Oil Company, Phillips Petroleum Company and Texaco Refining and Marketing Inc. (the “Settling Defendants”) for leave to file cross claims and third party complaints. A hearing was held on the motion on May 31, 1994. The Court, having considered the materials filed both in support of and in opposition to the motion, the arguments of counsel, and *630 being fully advised in the premises, now ORDERS as follows:

Background

This litigation concerns the Powder River Crude Processors facility (the “Site”), located approximately six miles west of Glenrock, Wyoming. The thirty-two acre Site received petroleum material that was below pipeline standards. The Site was constructed to process oil received into pipeline quality crude. The Site consists primarily of above-ground steel tanks, underground concrete tanks and surface impoundment areas.

This ease was initiated on February 19, 1993, when the United States of America filed a complaint pursuant to Section 7003 of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6973. Section 7003 of RCRA allows the United States to bring suit against “any person;” including any past or present generator, transporter, or owner or operator of a solid or hazardous waste treatment, storage or disposal facility who has contributed or is contributing to handling, storage, treatment, transportation or disposal which may present an “imminent and substantial endangerment to health or the environment.” 42 U.S.C. § 6973(a). The complaint seeks (1) an injunction requiring an investigation and cleanup of the Site, (2) compliance with Administrative Orders issued by the EPA against certain of the defendants and (3) civil penalties for violations of the Administrative Orders.

The complaint named ten defendants: Conoco Pipe Line Company (“Conoco”), Texaco Marketing and Refining Inc. (“Texaco”), Phillips Petroleum Company (“Phillips”), True Oil Company (“True”), Eighty-Eight Oil Company (“Eighty-Eight”), Jim’s Water Service, Inc. (“JWS”), Valentine Construction Co., Inc., Dale Valentine, William Valentine and Sons, Inc. (“Valentine Defendants”), and Richard Wallace (“Wallace”). These defendants fall into three categories as follows: owner/operators of the Site; transporters of oil to the Site; and generators, or those entities that were sources of oil.

On March 4, 1994, the United States lodged a proposed Consent Decree, which led to the settlement of this lawsuit with respect to the five generator defendants — Conoco, Eighty-Eight, True, Phillips and Texaco (“Settling Defendants”). The Consent Decree, as approved by this Court, requires the Settling Defendants jointly and severally, to finance and conduct a cleanup of the Site at an estimated cost of $4.4-$8.9 million. 1 Thus, under the terms and conditions of the Consent Decree, work performed by the Settling Defendants will result in the removal and treatment of wastes originating with or handled by persons not party to the Decree.

Because the Settling Defendants must now fulfill cleanup obligations for which Non-settling Defendants and certain third parties are also responsible, the Settling Defendants have requested leave to file cross claims and third-party complaints against those parties, under theories of contribution and indemnification. In the context of this litigation, if Settling Defendants’ motion for leave is granted, the Settling Defendants will recover only that appropriate share of cleanup costs attributable to responsible Non-Settling Defendants and third parties. Conversely, if the Settling Defendants’ motion for leave is denied, Settling Defendants assume the entire cleanup cost, but will have no recourse to recover any portion of those costs attributable to Non-Settling Defendants or third parties who contributed to contamination of the Site, and who otherwise are liable to the government for remediation of the Site. In other words, denial of the motion will effectively immunize the Non-Settling Defendants and other responsible parties (who may have generated from fifty to ninety percent of the materials to be processed) from any liability for cleanup costs. 2

Non-Settling Defendant JWS opposes the Settling Defendants’ motion for leave to file cross claims and third-party complaints, as *631 serting that neither RCRA nor federal common law supports a right to contribution.

Standard of Review

Pursuant to Rule 15(a), Fed.R.Civ.P., the Settling Defendants seek leave to amend to assert cross-claims against the Non-Settling Defendants. See Fed.R.Civ.P. 13(g) (authorizing cross-claims against coparties). Such “leave shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). However, leave to amend should be denied if the amended pleading would fail to state a claim as a matter of law. Ocasek v. Hegglund, 673 F.Supp. 1084 (D.Wyo.1987).

Pursuant to Rule 14(a), Fed.R.Civ.P., the Settling Defendants also seek leave to file Third Party Complaints. Under that rule, a Third Party Complaint is proper where the proposed third party defendant “is or may be liable to the third-party plaintiff for all or part of the plaintiffs claim against the third-party plaintiff.” Fed.R.Civ.P. 14(a). “As the rule is designed to reduce multiplicity of litigation and therefore is remedial in character, it should be construed liberally.” Lambert v. Inryco, Inc., 569 F.Supp. 908, 911 (W.D.Okla.1980).

Discussion

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United States v. Valentine, 856 F. Supp. 627, 1994 U.S. Dist. LEXIS 8768, 1994 WL 288465 (D. Wyo. 1994).

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