Village of Milford v. K-H Holding Corporation, a Foreign Corporation Trw, Inc., a Foreign Corporation

390 F.3d 926, 34 Envtl. L. Rep. (Envtl. Law Inst.) 20143, 59 ERC (BNA) 1513, 2004 U.S. App. LEXIS 24327, 2004 WL 2661279
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 23, 2004
Docket03-1597
StatusPublished
Cited by37 cases

This text of 390 F.3d 926 (Village of Milford v. K-H Holding Corporation, a Foreign Corporation Trw, Inc., a Foreign Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Village of Milford v. K-H Holding Corporation, a Foreign Corporation Trw, Inc., a Foreign Corporation, 390 F.3d 926, 34 Envtl. L. Rep. (Envtl. Law Inst.) 20143, 59 ERC (BNA) 1513, 2004 U.S. App. LEXIS 24327, 2004 WL 2661279 (6th Cir. 2004).

Opinion

OPINION

COOK, Circuit Judge.

This case concerns a Michigan law trespass claim and claims under the Comprehensive Environmental Response and Liability Act (“CERCLA”) and Michigan’s Natural Resources and Environmental Protection Act (“NREPA”).

The district court granted judgment as a matter of law in favor of Defendant-Appel-lees K-H Holding Corporation and TRW, Inc. (“K-H” collectively) on Plaintiff-Appellant Village of Milford’s trespass claim because the claim was barred by the statute of limitations. It found K-H not liable under CERCLA or NREPA because it found that Milford’s costs incurred in response to a release of hazardous substances by K-H were not “necessary” or “required” as the statutes respectively require, and the contamination was not “caused” by K-H, as NREPA requires.

We conclude that the district court correctly applied the three-year statute of limitations for trespass, and affirm the distinct court’s grant of judgment notwithstanding the verdict. We conclude that the district court incorrectly applied CERCLA and NREPA to deny Milford recovery of any of its costs, vacate its judgment on those claims, and remand the case for further proceedings.

I. FACTS AND PROCEDURAL HISTORY

The factual history of the trespass claim focuses on what Milford knew and when it knew it. In 1989, Milford learned that its municipal water supply wells contained two hazardous chlorinated compounds, trichloroethene (“TCE”) and dicholorethene (“DCE”). In response, the Michigan Department of Natural Resources (“MDNR”) required Milford to increase monitoring of its wells from once every six years, to four times per year. Milford later discovered three other hazardous chlorinated compounds in its groundwater: dichloroethane (“DCA”), trichloroethane (“TCA”), and tet-rachloroethene (“PCE”). In 1994, Milford retained an environmental attorney and consultants to determine the source of contamination. Also in 1994, Milford asked MDNR to determine that K-H was a “potentially responsible party” (“PRP”) with respect to the contamination. MDNR declined, and advised Milford to conduct additional studies. Milford continued to study the area’s geology and groundwater contamination, and in 1996, asked the Michigan Department of Environmental Quality (“MDEQ”) to identify K-H as a PRP. MDEQ did so in February 1997, based upon Milford’s studies. During this time, Milford never stopped using its water, which at all times met federal safe drinking water standards.

Since about 1971, K-H has owned and operated a factory, situated uphill and 1,400 feet north of Milford’s wells. K-H used TCE and TCA, which degrade to DCE and DCA, respectively. Before 1975, waste oil containing chlorinated compounds was spread by K-H and its predecessors on K-H’s property. In the late 1970s and early 1980s, waste oil leaked from a dumpster onto K-H’s property.

In 1993, K-H discovered that DCA, DCE, PCE, TCA, and TCE were in the groundwater on its property, and were migrating toward Milford’s wells. K-H *931 provided Milford with a report and documentation of its investigation but denied responsibility for contamination of Milford’s wells. K-H began monitoring activities, which included sampling water from area residents’ wells and creating new monitoring wells. In 1994, K-H began remedial measures. K-H installed a soil vapor extraction system which, after it began operation in 1997, removed contaminants from the soil at the facility. It also installed a groundwater interdiction system to stop contaminants flowing south, toward Milford’s wells, in 1999.

Milford filed suit against K-H on March 1, 1999, seeking damages for trespass under Michigan law, and recovery of its costs under CERCLA, 42 U.S.C. § 9607, and NREPA, Mich. Comp. Laws § 324.20126.

A jury found K-H liable for trespass, but the court granted judgment notwithstanding the verdict for K-H, determining that the three-year statute of limitations barred the claim.

The statutory claims were tried to the bench. Before trial, the court ruled that the only attorney’s fees that Milford could recover under CERCLA, if it could recover at all, were those related to determining that K-H was a PRP. After the trial, the court concluded that the CERCLA claim failed because Milford’s response costs were not “necessary.” The court concluded that the NREPA claim failed because Milford did not show by a preponderance of the evidence that K-H “caused” the release of contaminants, and because Milford’s actions were not a “required” response to the contamination.

II. THE TRESPASS CLAIM

A. Standard of Review

When exercising jurisdiction over state claims, this court follows state law standards for granting motions for judgment notwithstanding the verdict. J.C. Wyckoff & Assoc., Inc. v. Standard Fire Ins. Co., 936 F.2d 1474, 1483 (6th Cir.1991). Michigan courts review a trial court’s decision to grant judgment notwithstanding the verdict de novo. Sniecinski v. Blue Cross & Blue Shield of Mich., 469 Mich. 124, 666 N.W.2d 186, 192 (2003). Judgment notwithstanding the verdict should be granted “only when, viewing the evidence and all legitimate inferences in a light most favorable to the non-moving party, there remain no issues of material fact upon which reasonable minds could differ.” Ewing v. City of Detroit, 252 Mich.App. 149, 651 N.W.2d 780, 786 (2002), rev’d on other grounds, 468 Mich. 886, 661 N.W.2d 235 (2003).

B. The Discovery Rule

In Michigan, the statute of limitations for trespass is three years. Mich. Comp. Laws § 600.5805(10). The parties dispute whether CERCLA or Michigan law determines when the statute of limitations begins. We conclude that both CERCLA and Michigan law provide the same commencement date, and that this date was more than three years before Milford filed its suit.

CERCLA provides that if a state statute of limitations provides a commencement date for a property damages claim that results from a release of hazardous substances into the environment that is earlier than the “federally required commencement date,” then the statute of limitations for the state law claim will commence at the federally required date, rather than the state law date. 42 U.S.C. § 9658(a)(1). The federally required commencement date is the date on which “the plaintiff knew (or reasonably should have known) that the ... property damages ... were caused by or contributed to by the hazardous substance or pollutant or contaminant concerned.” 42 U.S.C. § 9658(b)(4)(A).

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Bluebook (online)
390 F.3d 926, 34 Envtl. L. Rep. (Envtl. Law Inst.) 20143, 59 ERC (BNA) 1513, 2004 U.S. App. LEXIS 24327, 2004 WL 2661279, Counsel Stack Legal Research, https://law.counselstack.com/opinion/village-of-milford-v-k-h-holding-corporation-a-foreign-corporation-trw-ca6-2004.