dismantling and processing of junk electrical components will be dismissed.
b. failure to state a claim - statute of limitations
GE moves to dismiss contending the claims against it are time-barred. Specifically, GE makes the following argument: There had been EPA proceedings against the plaintiffs under the Toxic Substances Control Act charging improper storage and handling of PCB's. As a result of these proceedings, plaintiffs knew, at least by March, 1981, that the electric components on their site contained hazardous PCB's. However, the present action was not commenced until May 9, 1986. Therefore plaintiffs' claims against GE are barred by Pennsylvania's two year statute of limitations for tort claims.
In this action plaintiffs seek recovery of clean-up costs, as well as damages for injury to the site and to the business. According to the complaint, the contamination of the site was discovered after May, 1984 and clean-up costs were expended after that time. (Ex. A and B). The business ceased its operations in 1984 (para. 19). Thus, the injuries for which plaintiffs seek recompense did not occur until after May, 1984 and the complaint was timely filed within two years of the injury.
Of course, finding that the complaint was timely filed does not mean that the earlier EPA enforcement action is not relevant. Because of EPA's enforcement action, the plaintiffs may well have known, or should have known, at least by March, 1981, that the electrical components on the site contained PCB's. This knowledge may well be relevant to whether the absence of any warning, as asserted by plaintiffs, in fact caused injury to the plaintiffs.
c. lack of subject matter jurisdiction
GE moves to dismiss for lack of subject matter jurisdiction.
There are 23 defendants: 3 manufacturers, 23 suppliers, and 1 manufacturer-supplier. Federal jurisdiction over the manufacturer defendants is based on diversity of citizenship. Plaintiffs are citizens of Pennsylvania (para. 1.1, 1.2); GE, one of the manufacturer defendants, is a citizen of Connecticut (para. 2.16); Allis Chalmers Corp., another manufacturer defendant, is a citizen of Wisconsin (para. 2.11); and Wagner Electric Company, the third manufacturer defendant, is a citizen of New Jersey (para. 2.11). There is complete diversity between plaintiffs and the manufacturer defendants.
Federal jurisdiction over the supplier defendants is based on CERCLA, 42 U.S.C. § 9601 et seq. Citing United States v. Westinghouse Electric Co., 22 E.P.C. 1230 (S.D. Ind. 1983) and Broderick Investment Co. v. Monsanto Co., No. 86 CV 334 (D. Col. 1986), GE argues the supplier defendants were bona fide sellers of junk electrical components insulated from liability under CERCLA, and therefore the non-diverse citizenship of some of the supplier defendants must be considered in determining whether there is complete diversity over the manufacturer defendants. Contrary to GE's reading of Westinghouse Electric and Broderick Investment Co., both cases recognize that generators of hazardous waste, such as plaintiffs allege the supplier defendants to be, may be liable under CERCLA. Thus, there is CERCLA jurisdiction over the supplier defendants. Because there is an independent basis for federal jurisdiction over the supplier defendants, the fact that some of the supplier defendants are not diverse to the plaintiffs, does not destroy the otherwise complete diversity jurisdiction over the manufacturer defendants. See Romero v. International Terminal Operating Co., 358 U.S. 354, 381, 3 L. Ed. 2d 368, 79 S. Ct. 468, reh. denied, 359 U.S. 962, 3 L. Ed. 2d 769, 79 S. Ct. 795 (1959).
The lone manufacturer-supplier defendant, Westinghouse Electric Company, is a citizen of Pennsylvania (para. 2.15). To the extent that claims are asserted against it as a supplier defendant, there is jurisdiction under CERCLA. Because there is an independent basis for federal jurisdiction over Westinghouse Electric, to the extent that claims are asserted against it as a manufacturer defendant there is pendent jurisdiction. See United Mine Workers v. Gibbs, 383 U.S. 715, 16 L. Ed. 2d 218, 86 1130 (1966).
The complaint identifies Allis-Chalmers as a manufacturer of electrical components containing PCB's. Allis-Chalmers is named as a defendant in two counts: Count 1 sets forth a products liability claim under § 402A, Count 5 sets forth a claim for a negligent failure to warn. Federal jurisdiction over Allis-Chalmers is based on diversity.
Allis-Chalmers moves to dismiss for lack of subject matter jurisdiction and for failure to state a claim. The issues raised by Allis-Chalmer's motion are substantially similar to those raised by GE's motion. Therefore the discussion and decision on those issues will not be repeated.
3. Robert Strellac
The complaint identifies Robert Strellac as a supplier of junk electrical components containing PCB's. Strellac is named as a defendant in Counts 1 - 4 and 6 - 9.
Strellac moves to dismiss for lack of subject matter jurisdiction. The complaint recites that CERCLA imposes liability on persons who arrange for disposal of hazardous substances (para. 72), the so-called generators of hazardous waste. The complaint identifies the supplier defendants, including Strellac (para. 2.20), as persons who disposed of hazardous substances (para. 73). These allegations are sufficient to invoke federal jurisdiction.
4. Max Berman and Edward P. Green
The complaint identifies Max Berman and Edward P. Green as suppliers of junk electrical components containing PCB's. Berman and Green are named as defendants in Counts 1-4 and 6-9. Federal jurisdiction over Berman and Green is based on CERCLA.
Berman and Green move to dismiss for failure to state a claim contending the plaintiffs were actively responsible for the release of hazardous substances and therefore cannot maintain an action under CERCLA.
CERCLA creates a private cause of action against statutorily defined "responsible parties" for recovery of response costs incurred by any other person. Walls v. Waste Resource Corp., 761 F.2d 311 (6th Cir. 1985); State of New York v. Shore Realty Corp., 759 F.2d 1032, 1042 (2d Cir. 1985); City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135 (E.D. Pa. 1982). However, at least one court has recognized that the equitable defense of unclean hands is available in a private response cost recovery action under CERCLA. Mardan Corp. v. C.G.C. Music, Ltd., 600 F. Supp. 1049, 1057-1058 (D. Ariz. 1984), aff'd on other grounds, 804 F.2d 1454 (9th Cir. 1986); see also D'Imperio v. United States, 575 F. Supp. 248, 253 (D. N.J. 1983) ("In order to seek recovery under this section, it is necessary for the plaintiff to prove that he himself is not liable for these costs."); contra United States v. Conservation Chemical Company, 628 F. Supp. 391, 404-405 (W.D. Mo. 1985) ("Application of the unclean hands defense in this context would turn Congressional intent on its head.") and cases cited at Marden Corp., 757 F.2d 1457, n. 3.
Berman and Green assert the unclean hands defense. They contend plaintiffs were actively responsible for the release of hazardous substances and therefore cannot maintain this action under CERCLA. In response, plaintiffs concede the availability of the unclean hands defense, but assert that they were innocent victims of the release of hazardous substances on their site.
On a motion to dismiss for failure to state a claim, the allegations of the complaint must be construed in the light most favorable to the plaintiff and accepted as true. Hochman v. Board of Education of the City of Newark, 534 F.2d 1094 (3d Cir. 1976). In the complaint the plaintiffs allege they were innocent victims of the release of hazardous substances on their site. Thus, assuming without deciding, that the defense of unclean hands is available in a private response cost recovery action under CERCLA, the face of the complaint does not establish the defense.
If, on a motion to dismiss for failure to state a claim, matters outside the pleading are presented and considered, the motion to dismiss is converted into a motion for summary judgment. Fed.R.Civ.P. 12(b). Berman and Green have presented, and the Court has considered, records of the earlier EPA enforcement action charging the plaintiffs with the improper storage and handling of PCB's. Nevertheless, again assuming the availability of the unclean hands defense, this material does not establish the defense of unclean hands; rather, at most, it raises a factual issue concerning plaintiffs' participation in the release of hazardous substances.
An appropriate order will be entered.
Dated: April 15, 1987.
AND NOW April 15, 1987 in accordance with the foregoing memorandum opinion, IT IS HEREBY ORDERED that
a) to the extent that Counts 1 and 5 allege injury as a result of the dismantling and processing of junk electrical components, these allegations are dismissed; and
b) Counts 2-4 and 6-9 do not state a claim against General Electric, Allis-Chalmers and Wagner Electric and are dismissed as to these three defendants; Counts 2-4 and 6-9 do not state a claim against Westinghouse Electric for the manufacture of electrical components and are dismissed against Westinghouse Electric as a manufacturer, but are not dismissed against Westinghouse Electric as a supplier; and