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CITY OF PHILADELPHIA v. STEPAN CHEM. CO.

August 4, 1982

CITY OF PHILADELPHIA, Plaintiff,
v.
STEPAN CHEMICAL COMPANY, et al., Defendants



The opinion of the court was delivered by: DITTER

 In this action, the City of Philadelphia ("the City") seeks to recover clean-up costs and consequential damages which resulted from the illegal dumping on city property of industrial waste generated by the defendants. The suit is predicated upon numerous federal and state environmental statutes as well as several common law theories of recovery. Defendants have filed a comprehensive motion for judgment on the pleadings under Fed.R.Civ.P. 12(c) asserting that the statutes upon which the City relies do not support its claim and that, as a matter of law, they cannot be held liable on any of the common law causes of action. For the reasons that follow, the motion will be granted in part and denied in part.

 "In considering a motion for judgment on the pleadings, the trial court is required to view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the nonmoving party." Chuy v. National Football League Players' Association, 495 F. Supp. 137, 138 (E.D.Pa.1980), quoting 5 C. Wright and A. Miller, Federal Practice and Procedure § 1368, at 690 (1969). A review of the pleadings in light of this standard reveals the following factual setting. Defendants are a number of concerns which generate industrial waste as a byproduct of their operations. At various times, each defendant contracted with either Lightman Drum Company ("Lightman") or ABM Disposal Service Company ("ABM") to haul and dispose of the waste. During 1974 and 1975, ABM and Lightman illegally dumped the waste at a landfill on Enterprise Avenue in Southwest Philadelphia ("the Enterprise site") which was owned by the City and intended for use only by the City. Access to the Enterprise site was gained by bribing two City employees. The existence of substantial quantities of waste on the Enterprise site was discovered by City officials in 1979. Criminal convictions were obtained against the employees who accepted the bribes and against Lightman and its president, Jerome Lightman. Charges are pending against the president of ABM, Ellis Barnhouse, who is presently a fugitive. *fn1"

 The City alleges that as a result of this illegal dumping, the soil at the Enterprise site has been contaminated and the adjacent Delaware River and groundwater underlying the site have been polluted. This has obligated the City to commence a comprehensive clean up program having an estimated cost of $10 million. In addition, a sewage sludge recycling center which is scheduled to be built on the Enterprise site has been postponed indefinitely, a delay which will increase construction costs by about $20 million. The City filed a nine-count complaint seeking to recover $30 million in damages as well as civil penalties. The complaint sets forth the following claims for relief: (1) liability under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA); (2) the citizen suit provision of the Clean Water Act, 33 U.S.C. § 1365(a); (3) the federal common law of nuisance; (4) common law strict liability; (5) the Pennsylvania Solid Waste Management Act, 35 P.S. § 6018.101 et seq. (the SWMA); (6) the Pennsylvania Clean Streams Law, 35 P.S. § 691.1 et seq. (7) common law trespass and nuisance; (8) common law negligence; and (9) various provisions of the Philadelphia Code. Jurisdiction is based upon 28 U.S.C. § 1331, 42 U.S.C. § 9613(b) (granting federal courts "exclusive, original jurisdiction" of all controversies arising under CERCLA), and 33 U.S.C. § 1365(a) (granting federal courts jurisdiction over Clean Water Act actions). Jurisdiction over the state claims is pendent.

 COUNT I COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT

 The City's CERCLA claim is predicated upon the statute's liability provision, 42 U.S.C. § 9607(a). *fn2" That provision designates three categories of "responsible persons." They are (1) present and former owners of hazardous substances disposal sites; (2) transporters of hazardous substances, and (3) those who arrange for the transport or disposal of hazardous substances (normally generators). *fn3" These responsible persons are liable *fn4" for three types of costs which are incurred as the result of a release or threatened release *fn5" of the hazardous substances: (1) governmental response costs, (2) private response costs incurred "by any other person" consistent with the national contingency plan, *fn6" and (3) damage to natural resources. It can readily be seen that the three categories of "responsible persons" set forth in 42 U.S.C. § 9607(a)(1)-(4) encompass all of the principal actors in this litigation -- the City owns and operates the landfill, defendants generated the hazardous substances and contracted for their disposal, and ABM and Lightman acted as transporters. Thus, had the federal or state government undertaken to clean up the Enterprise site, all of these parties arguably would be liable for the cost of removal or other remedial action under 42 U.S.C. § 9607(a)(4)(A).

 However, that did not occur. Instead, the City, itself possibly subject to liability for governmental response costs, undertook the clean up and now contends that defendants are liable for its "necessary costs of response" under 42 U.S.C. § 9607(a)(4)(B). It is this anomaly which gives rise to defendants' primary argument in seeking judgment on the City's CERCLA claim. They contend that the term "any other person" as used in 42 U.S.C. § 9607(a)(4)(B) does not include a party which itself is subject to liability under the act. Although the statute's language does not explicitly support this construction, defendants assert that it is the only interpretation consistent with the act's structure and with the logical functioning of its many interrelated provisions. Specifically, they point to several inconsistencies in the administration of the act's funding provisions *fn7" which would result if the City may bring this action. Under 42 U.S.C. § 9611(a), the president is authorized to use money in the fund for payment of necessary response costs "incurred by any other person as a result of carrying out the national contingency plan . . . ." Defendants contend that if the term "any other person" includes those who are subject to liability under the act, responsible persons could claim against the fund and against other responsible parties. Because the government has subrogation rights for payments made from the fund, see 42 U.S.C. § 9612(c)(1), the City's interpretation would assertedly result in a merry go round of litigation with the government suing a responsible person which in turn could sue other responsible persons which in turn could claim against the fund and so forth. Defendants also point to the claims procedure under 42 U.S.C. § 9612 as demonstrating the untenability of the City's position as a plaintiff. Under this section, a party making claim against the fund must first make demand for response costs upon known responsible persons and wait sixty days for satisfaction of the demand. If reimbursement is not forthcoming, the claimant then has the choice of obtaining payment from the fund or suing the responsible person under 42 U.S.C. § 9607(a)(4)(B). Defendants argue that Congress could not have intended to give responsible parties the same right to claim against the fund and sue other responsible persons as does a nonculpable third party.

  Concededly, defendants' approach possesses a degree of analytic neatness. Regardless of how tidy it may be, however, I cannot ignore the end result of their logic -- that the City, which did not voluntarily allow *fn8" the placement of the hazardous substances on its property and which sustained damages as the result of their illegal disposal, is precluded from recovering its clean-up costs from those parties who engaged in the very activities for which they can be held responsible under the act. Because such preclusion is not compelled by the language of CERCLA, by its legislative history, or by the environmental objectives which it is designed to achieve, I will reject defendants' position and deny their motion for judgment on Count I of the complaint.

 Chief Justice Marshall's timeless observation that "where the mind labors to discover the design of the legislature, it seizes everything from which aid can be derived . . . ." United States v. Fisher, 6 U.S. (2 Cranch) 358, 386, 2 L. Ed. 304 (1805), is particularly apt here. The statute itself is vague and its legislative history indefinite. However, nothing in the language of 42 U.S.C. § 9607(a) compels the result sought by defendants. The provision merely sets forth, in general terms, three categories of "persons" entitled to recover response costs from those parties designated as liable for such costs. The first category consists of the federal and state governments which are entitled to recoup "all costs of removal or remedial action . . . not inconsistent with the national contingency plan." The provision in question, which follows immediately thereafter, permits recovery of "any other necessary costs of response incurred by any other person consistent with the national contingency plan." Under 42 U.S.C. § 9601(21) both federal and state governments are subsumed under the definition of person. In the context in which it appears, then, the term "any other person" is quite conceivably designed to refer to persons other than federal or state governments and not, as defendants argue, to persons other than those made responsible under the act. Thus, although not a model of clarity, the provision does not specifically exclude parties who may be liable for the costs of governmental action nor does its language necessarily support such a construction.

 Although the legislative history does little to clarify this question, it does demonstrate that defendants' position cuts directly against CERCLA's objectives and the environmental concerns which prompted its enactment. CERCLA was originally proposed by its sponsors in both Houses as "a multi-faceted federal regulatory scheme designed to provide an independent basis for environmental claims by both government and private parties." Dore, The Standard of Civil Liability for Hazardous Waste Disposal Activity: Some Quirks of Superfund, 57 Notre Dame Lawyer 260, 267 (1981). What was enacted and signed into law is a severely diminished piece of compromise legislation from which a number of significant features were deleted. *fn9" However, it is clear from the discussions which preceded the passage of CERCLA that the statute is designed to achieve one key objective -- to facilitate the prompt clean up of hazardous dumpsites by providing a means of financing both governmental and private responses and by placing the ultimate financial burden upon those responsible for the danger. The liability provision is an integral part of the statute's method of achieving this goal for it gives a private party the right to recover its response costs from responsible third parties which it may choose to pursue rather than claiming against the fund.

 Viewing the statute in this context, I cannot attribute to Congress an intention to preclude the City from maintaining a CERCLA action in this case. While the City is admittedly the owner of the Enterprise site, and might have been liable to the federal or state governments had those entities commenced the clean up, *fn10" the dispositive consideration is that the City did not operate a hazardous waste disposal facility on the premises and it asserts that it did not voluntarily permit the placement of the hazardous substances on its property. *fn11" Moreover, it has undertaken to clean up the ensuing damage and now seeks to recover its response costs from parties which were allegedly involved in the illegal dumping and which are made expressly liable for response costs. I cannot conclude that the City's right to maintain this action is barred by the hypothetical possibility that had the federal or state government brought this suit, the City too would be liable. The parade of horrors posited by defendants does not counsel against such a result. The simple fact is that there has been no expenditure of superfund monies nor have the federal or state governments commenced an action against the City or anyone else. Rather, a party which has incurred response costs seeks to recover them from responsible parties, an action expressly authorized by CERCLA. This action is not barred because of some theoretical inconsistencies with statutory provisions which have not been made operative in this case.

 Defendants advance two additional reasons for the dismissal of the City's CERCLA claim, neither of which has merit. First, they contend that because the City failed to aver that it made demand upon them at least 60 days before commencing suit as required by 42 U.S.C. § 9612(a), *fn12" this court is without jurisdiction to hear the case. While the City concedes that notice was not pleaded, it represents in its brief that the required claim was timely made against defendants. The defendants do not specifically deny the substance of this assertion, *fn13" but vigorously argue that notice is a jurisdictional prerequisite which must be pleaded. Although I am inclined to reject defendants' mechanistic interpretation of the claims procedure under section 112(a), *fn14" I need not rule on this issue in light of the City's representation that defendants did receive the requisite notice. I will, mea sponte, deem the complaint as amended to aver the giving of notice without prejudice to defendants' right to challenge the fact or sufficiency of notice on motion for summary judgment.

 Second, defendants assert that the complaint cannot allege the City's clean up operation is consistent with the National Contingency Plan as required by 42 U.S.C. 9607(a)(4)(B) and therefore the CERCLA claim cannot proceed. This argument is not advanced with a great deal of clarity. Plaintiff has averred that its clean up is consistent with the national contingency plan. See Second Amended Complaint para. 54. Defendants seem to argue that notwithstanding this averment, plaintiff's complaint must fail because it does not allege detailed compliance with various requirements of the proposed national contingency plan. *fn15" I reject this contention. Even assuming that consistency with the plan goes to the existence of a claim for relief under CERCLA as opposed to the recoverability of various items of costs, *fn16" this is not an issue that can be resolved on the pleadings. Rather, its disposition must await the development of a record.

 COUNT II CLEAN WATER ACT *fn17"

 The City predicates Count II of its complaint upon sections 311 and 505(a) of the Clean Water Act, 33 U.S.C. §§ 1321 and 1365(a). Section 311(b)(3) prohibits the illegal discharge of oil or hazardous substances "into or upon the navigable waters of the United States, adjoining shorelines, or into or upon the waters of the contiguous zone. . . ." 33 U.S.C. § 1321(b)(3). Section 505(a) provides as follows:

 
(a) Except as provided in subsection (b) of this section, any citizen may commence a civil action on his own behalf --
 
(1) against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent permitted by the eleventh amendment to the Constitution) who is alleged to be in violation of (A) an effluent standard or limitation under this chapter or (B) an order issued by the Administrator or a State with respect to such a standard or limitation, or
 
(2) against the Administrator where there is alleged a failure of the Administrator to perform any act or duty under this chapter which is not discretionary with the Administrator.
 
The district courts shall have jurisdiction, without, regard to the amount in controversy or the citizenship of the parties, to enforce such an effluent standard or limitation, or such an order, or to order the Administrator to perform such act or duty, as the case may be, and to apply any appropriate civil penalties under section 1319(d) of this title.

 The City alleges that defendants violated section 311 by discharging hazardous substances into the Delaware River and its adjoining shoreline and that section 505(a) provides it with an express right of action *fn18" to recover its "costs of removal". *fn19" Even accepting the dubious proposition that defendants themselves discharged hazardous substances within the meaning of the act, it is clear that the City's claim for damages is authorized by neither section 311 nor 505(a). Accordingly, I will grant defendants' motion for judgment on Count II of the complaint.

 "Section 505 evidences a congressional intent to carefully channel public participation in the enforcement of the Act." City of Evansville v. Kentucky Liquid Recycling, Inc., 604 F.2d 1008, 1015 (7th Cir. 1979) (footnote omitted), cert. denied, 444 U.S. 1025, 100 S. Ct. 689, 62 L. Ed. 2d 659 (1980). An examination of the language of this provision, as well as its legislative history, demonstrates conclusively that its sole purpose is to provide private parties with a mechanism to compel enforcement of effluent standards promulgated pursuant to the act. *fn20" It does not authorize a private right of action for the recovery of damages. Under section 505(a), a party may bring an action against any person who is alleged to be in violation of an effluent standard or limitation or an order issued by the EPA or a state with respect to an effluent standard or limitation. In addition, he may sue the administrator of the EPA to compel the performance of "any act or duty under this chapter which is not discretionary . . . ." The district court's jurisdiction to entertain such an action is limited to enforcing the effluent standard or limitation, ordering the administrator ...


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