upon these regulations, which were applicable to Chem Waste in November 1980, defendants argue that Chem Waste may not recover CERCLA response costs because to permit such recovery would render RCRA a nullity. Defendants further contend that CERCLA's plain language, legislative history, and policy underpinnings support their position.
Although there is some merit to defendants' arguments, the court finds that the better-reasoned approach is that adopted by the court in Mardan Corp. v. C.G.C. Music, Ltd., 600 F. Supp. 1049 (D. Ariz. 1984), aff'd, 804 F.2d 1454 (9th Cir. 1986), where the court held that RCRA does not preempt CERCLA. CERCLA's preemption provision, placed prominently at the beginning of the statute's liability provision, states that, subject to certain defenses not relevant here, liability shall attach "notwithstanding any other provision or rule of law . . . ." 42 U.S.C. § 9607(a) (1982).
Defendants argue further that Congress intended CERCLA to apply only to abandoned hazardous waste facilities and RCRA to apply only to active facilities. CERCLA's statutory language, however, belies such a contention. First, § 101(20)(A) of CERCLA differentiates between a "facility" and an "abandoned facility." See 42 U.S.C. § 9601(20)(A). By this language, Congress clearly evinced its intent that CERCLA apply to both active and abandoned facilities. Second, Congress distinguished RCRA sites when it deemed such differentiation important. In § 103(c) of CERCLA, for example, Congress exempted from notice requirements owner/operators who have been issued permits or been accorded interim status under RCRA. See 42 U.S.C. § 9603(c) (1982). The liability provisions of CERCLA, however, which are at issue here, contain no exemption for RCRA owner/operators. See 42 U.S.C. § 9607; Mardan, 600 F. Supp. at 1054. Thus, defendants' statutory language argument must fail.
Finally, defendants argue that the policies underlying CERCLA mandate a decision in their favor. In urging their position, defendants explore a parade of horribles and conclude that a decision in Chem Waste's favor would detract from the statute's efficacy and would, in fact, spur a rash of illegal hazardous waste disposal. The court finds these arguments unpersuasive.
Defendants' policy arguments must fail because permitting RCRA owner/operators to recover CERCLA response costs from generators actually promotes, rather than detracts from, CERCLA's policies. First, an owner/operator that knows it can seek contribution from a generator will promptly clean-up a hazardous waste site. Defendants argue, though, that Chem Waste did not provide a prompt clean-up at the Lyncott facility, and that such inaction belies Chem Waste's argument that permitting owner/ operators to recover response costs provides an incentive for prompt clean-up. Although it appears Chem Waste was less than diligent in its efforts at the Lyncott facility, defendants' argument is without merit: it was unclear at the time of the Lyncott clean-up that potentially responsible owner/operators could recover response costs from generators. Defendants cannot argue that response costs are unavailable to owner/operators and in the same breath suggest that Chem Waste was dilatory even though response costs were available to owner/operators. Second, permitting owner/operators to recover response costs from waste generators is consistent with CERCLA's goal of spreading the costs of environmental disasters. A theme running throughout CERCLA's legislative history is that all parties involved in hazardous waste disposal must share the costs thereof. Although parties may under certain circumstances "contract out" of CERCLA liability, see 42 U.S.C. § 9607(e)(2) (1982), an owner/operator presumably would take such a shifting of risks into account by charging waste generators a higher fee for hazardous waste disposal. Such an arrangement would fulfill Congress' intent that parties responsible for the release of hazardous substances bear the costs of response and costs of damage to natural resources.
In sum, the court holds that RCRA and its regulations do not preclude a RCRA owner/operator from recovering CERCLA response costs.
B. May a "Liable Party" Under CERCLA Maintain a Suit for Response Costs Under § 107 of CERCLA ?
In the face of statutory language that appears clearly to permit any person to recover its response costs from owners, operators, owner/operators, transporters, and generators, defendants argue that Chem Waste, as a potentially responsible party ("PRP"), may not recover such costs. Defendants base their argument on recent amendments to CERCLA, and it would seem, upon the equitable doctrine of "unclean hands."
The court finds both of these bases without merit and therefore holds upon this ground as well that Chem Waste may pursue its claim for response costs.
Defendants maintain that the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub. L. No. 99-499, 100 Stat. 1613, clarify that a PRP may not maintain a suit to recover response costs. Rather than supporting defendants' position, however, amended § 113(f) makes quite clear that a PRP may maintain an action against another PRP.
That section provides in pertinent part:
Any person may seek contribution from any other person who is liable or potentially liable under Section 9607(a) of this title, during or following any civil action . . . under section 9607(a) of this title . . . . Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 106 or section 107.
42 U.S.C. § 9613(f)(1) (1982) (emphasis added). This subsequent statutory enactment gives the court guidance in construing the earlier statute and is therefore entitled to great weight. See Red Lion Broadcasting Co. v. Federal Communications Commission, 395 U.S. 367, 380-81, 89 S. Ct. 1794, 23 L. Ed. 2d 371 (1969). The clear significance of the word "other" in § 113(f) is that a PRP may maintain a suit for contribution against another person who is or may be liable for response costs. To read the statute in any other manner would be to read language out of the statute, an activity that this court must not undertake absent some direction from Congress.
Also supportive of Chem Waste's position on this issue is Sand Springs Home v. Interplastic Corp., 670 F. Supp. 913 (N.D. Okla. 1987), where the court found that "a private party, even though a responsible party under CERCLA, who voluntarily pays CERCLA response costs may bring an action in its own behalf to collect cleanup costs against the parties allegedly responsible for the production and dumping of hazardous waste." Id. at 916. Defendants attempt to distinguish this case by revisiting their argument that a RCRA owner/operator may not recover CERCLA response costs. The court already has found, however, that this argument is of little merit. Defendants also suggest that Sand Springs is inapposite because the plaintiffs in that case were "innocent landowners"
who voluntarily remedied a hazardous situation, while Chem Waste and its predecessor contributed to the hazardous condition at the Lyncott facility and did not voluntarily undertake clean-up efforts at the site. Even assuming defendants' premises are correct, the court nevertheless holds that a PRP may recover response costs from another PRP. Defendants' arguments concerning "innocence" and "fault" are relevant only to the amount of response costs that Chem Waste may recover.
C. Is Chem Waste Precluded by Contract From Recovering Response Costs Under CERCLA ?
Defendants contend that Chem Waste assumed or succeeded to Old Stabatrol's liabilities for the Lyncott facility. Relying upon this contention, defendants then argue that Chem Waste is precluded by contract from recovering response costs under CERCLA.
1. Did Chem Waste Assume or Succeed to Old Stabatrol's Liabilities for the Lyncott Facility ?
Defendants argue that Waste Management and Chem Waste are responsible for Old Stabatrol's liabilities because: (a) Chem Waste expressly assumed Old Stabatrol's liabilities; and (b) the Old Stabatrol acquisition was a merger of Old Stabatrol into Chem Waste whereby Chem Waste continued Old Stabatrol's business and assumed Old Stabatrol's liabilities.
The court assumes for the purpose of this motion that Chem Waste did assume or succeed to Old Stabatrol's liabilities for the Lyncott facility.
Based upon the analysis that follows, however, the court will deny defendants' motion on this point.
2. Is Chem Waste Precluded by Warranty or Indemnity from Recovering CERCLA Response Costs ?
Defendants contend that Chem Waste assumed Old Stabatrol's Waste Disposal Contracts and is precluded by the express and implied terms of those contracts from recovering response costs under CERCLA. Defendants also argue that Chem Waste itself contracted with generators, and that express and implied provisions of these contracts preclude Chem Waste's suit.
Relying upon a tentative ruling of the court, defendants contend that Chem Waste may not recover response costs from its generators because the "essence" of the various waste disposal contracts was that the owner/operator would dispose of the hazardous waste in a safe, legal manner and would charge but a single fee for this service. According to defendants, Chem Waste's suit for response costs is an attempt to charge the generators a second fee for a service that Chem Waste and its predecessor performed improperly. Defendants argue that Chem Waste expressly and impliedly warranted the safe, legal disposal of the generators' waste, and that basic contract law therefore precludes Chem Waste from recovering CERCLA response costs from the generators.
Section 107(e)(2) of CERCLA provides that:
Nothing in this subchapter, including the provisions of paragraph (1) of this subsection, shall bar a cause of action that an owner or operator or any other person subject to liability under this section, or a guarantor, has or would have, by reason of subrogation or otherwise against any person.
42 U.S.C. § 9607(e)(2) (1982). Defendants contend this "language makes clear that the liability provisions of CERCLA do not abrogate contractual rights." Memorandum of Law in Support of the Motion for Summary Judgment by the Coalition Defendants and Vineland Chemical Company ("Defendants' Memorandum") at 72. Although it is debatable whether any provision of CERCLA is "clear," the court agrees that in this private suit for response costs, CERCLA's liability provisions do not abrogate the parties' contractual rights. Accordingly, the court shall first determine whether Chem Waste or its predecessor expressly warranted the safe, legal disposal of the generators' waste.
Defendant Armstrong argues that its contract, executed in February of 1981, precludes Chem Waste's recovery of response costs. Armstrong also asserts that it "had previously contracted with Old Stabatrol, and the Waste Management contract reaffirmed the terms of Armstrong's prior Agreement with Old Stabatrol." Defendants' Memorandum at 74. By not supplying a copy of its contract with Old Stabatrol, Armstrong apparently asks the court to assume that the terms of the contract were the same as those of the later contract, which Armstrong has provided the court. This we cannot do; there exists a clear issue of material fact, and summary judgment is therefore inappropriate. Summary judgment is no more proper with respect to waste disposed of pursuant to the February 1981 contract. In a cover letter to New Stabatrol, Armstrong stated that it had modified the proposed waste disposal agreement and that "if you are in agreement, please send us a signed copy of the revised contract and a copy of this letter signed at the appropriate place below; upon receipt we will consider the contract to be effective." Defendants' Exhibit 54. If such a signed copy exists, Armstrong has not produced it for the court. Thus, it is unclear whether Armstrong even had a contract with New Stabatrol, and summary judgment is therefore inappropriate.
Defendant Pfizer contends that it cannot be liable for CERCLA response costs because its standard form purchase order, issued to Old Stabatrol on November 8, 1979,
provided that "all articles, work, and services supplied hereunder, which are so required, will be in compliance with . . . all other applicable Federal, State and Local laws." Defendants' Exhibit 55. Pfizer admits, albeit in a footnote, that the purchase order submitted to the court is not the actual purchase order sent to Old Stabatrol: "Pfizer does not possess the purchase order, which was apparently sent to Old Stabatrol. However, a copy of the reverse side of a similar Pfizer purchase order form is submitted as page 4 of Exhibit 55." Defendants' Memorandum at 75 n.17 (emphasis added). It is beyond peradventure that summary judgment is inappropriate where the documents relied upon are of such a speculative nature. Accordingly, defendant Pfizer's motion on this basis must be denied.
Defendants Vineland and CPS have submitted to the court no waste disposal agreements with Vineland and Chem Waste or its predecessor. Thus, the court cannot hold that Chem Waste or its predecessor expressly warranted to Vineland or CPS the safe, legal disposal of their hazardous waste.
In sum, defendants have failed to prove that their contracts with Chem Waste or its predecessor expressly preclude Chem Waste from recovering CERCLA response costs from defendants.
Defendants also argue that Chem Waste and its predecessor impliedly warranted the safe, legal disposal of defendants' waste. As noted previously, at argument on December 12, 1986, the court tentatively ruled that an owner/operator in the business of operating a hazardous waste facility could not recover CERCLA response costs from a waste generator that contracted with the owner/operator for disposal of hazardous waste.
Upon further reflection and research, however, the court has concluded that Congress intended that all parties involved in hazardous waste disposal be responsible for the clean-up of hazardous waste releases. In exceptionally broad language, Congress provided that owner/operators, generators, and transporters " shall be liable for. . . any necessary costs of response incurred by any other person consistent with the national contingency plan. . . ." 42 U.S.C. § 9607(a) (1982) (emphasis added). CERCLA's plain language thus permits an owner/operator to sue a generator of hazardous waste. As discussed supra, two of CERCLA's primary objectives are the prompt clean-up of leaking hazardous waste sites and the provision of effective incentives for the careful handling of hazardous wastes in the future. One means of achieving these objectives is to "spread the risks" of liability among all parties involved in hazardous waste disposal. Were the court to rule that implied in every waste disposal contract is a warranty by the owner/operator that it will not seek to recover CERCLA response costs from the waste generator, this court would engage in judicial legislation that would reshape CERCLA's liability scheme. This we cannot do. Accordingly, the court holds that, absent an express contractual provision to the contrary, an owner/operator in the business of operating a hazardous waste facility may recover from generators of waste deposited at the facility any necessary costs of response incurred or to be incurred by the owner/operator in connection with a release or threatened release of hazardous substances at the facility.
Defendants also argue that Chem Waste may not recover response costs from defendants because Chem Waste and its predecessor expressly and impliedly agreed to indemnify defendants for any losses incurred in connection with waste deposited at the Lyncott facility.
Section 107(e)(1) of CERCLA provides that:
No indemnification, hold harmless, or similar agreement or conveyance shall be effective to transfer from the owner or operator of any vessel or facility or from any person who may be liable for a release or threat of release under this section, to any other person the liability imposed under this section. Nothing in this subsection shall bar any agreement to insure, hold harmless, or indemnify a party to such agreement for any liability under this section.
42 U.S.C. § 9607(e)(1) (1982). Defendants contend, and the court agrees, that this language authorizes indemnity agreements between owner/operators and generators. See Caldwell v. Gurley Refining Co., 755 F.2d 645 (8th Cir. 1985) (permitting lessor of dumping site to seek indemnity from lessee of site). Only one of the defendants,
Armstrong, argues that Chem Waste's predecessor expressly indemnified the defendant against all harm in connection with the disposal of waste at the Lyncott facility. Armstrong relies upon the same contracts discussed in part "a," supra. The court need not explore the language of these contracts, however, because Armstrong has not proved to the court that it ever contracted with Old Stabatrol, and it is unclear that Armstrong's agreement with New Stabatrol ever came into effect. Accordingly, Armstrong's motion on this point must be denied.
Defendants also argue that Chem Waste and its predecessor impliedly indemnified generators of waste deposited at the Lyncott facility. In light of the court's holding concerning the implied warranty issue, however, defendants' argument must fail here as well. Congress has enacted a broad statute, and the policies underlying that statute are clear. If owner/operators and generators wish to redistribute the risks distributed by Congress, they must do so clearly and unequivocally.
D. Does CERCLA Impose Successor Liability Upon Waste Management and Chem Waste ?
Defendants posit, albeit in uncharacteristically brief fashion, that a current owner of a hazardous waste facility succeeds to the liabilities of its predecessor. Although defendants are correct to a certain extent, the implications of their argument prove too much. Thus, the court will deny their motion upon this ground.
Section 107 of CERCLA, 42 U.S.C. § 9607, imposes strict liability for the clean-up of leaking hazardous waste sites upon four categories of PRPs: (1) the current owner and operator of a hazardous waste site; (2) the owner or operator at the time the waste was deposited at the site; (3) generators of waste sent to the site; and (4) transporters of waste sent to the site. The law is clear that these four categories of PRPs are jointly and severally liable for the clean-up of a leaking hazardous waste site. See, e.g., Colorado v. ASARCO, Inc., 608 F. Supp. 1484, 1489 (D. Colo. 1985); United States v. Wade, 577 F. Supp. 1326, 1338 (E.D. Pa. 1983). CERCLA does not, however, prohibit a PRP from seeking contribution from other PRPs. Indeed, the contrary is true. See, e.g., United States v. New Castle County, 642 F. Supp. 1258, 1269 (D. Del. 1986). Any other result would be both unjustified and unjust in that a single PRP would bear the entire cost of clean-up while other PRPs escaped all liability. CERCLA's legislative history demonstrates that Congress did not intend such a result. Accordingly, this court cannot, as a matter of law, require Chem Waste to bear the entire cost of clean-up at the Lyncott site.
E. Is Chem Waste Equitably Estopped From Denying Its Liability for Lyncott Response Costs ?
Defendants contend that Chem Waste is equitably estopped from denying its liability for Lyncott response costs because it failed to disclose to defendants problems encountered at the Lyncott facility. Defendants also allege that Chem Waste represented that it would ameliorate the conditions at the Lyncott facility, and that defendants relied upon these representations. Chem Waste responds that defendants confuse equitable estoppel and promissory estoppel, fail to demonstrate the elements of estoppel, and fail to eliminate issues of material fact. Because the court agrees that there are in dispute several material issues of fact, summary judgment cannot be granted upon this ground.
F. Does Chem Waste's Prior Litigation with the Metzval Parties Bar Chem Waste's Claim ?
Defendants argue that the dismissal with prejudice of Chem Waste's suit against the Metzval parties is res judicata to the present action. As Chem Waste points out, defendants can assert only that Chem Waste is claim precluded, not issue precluded, by the dismissal of the earlier case. This is so because no issues were fully and fairly litigated by virtue of the dismissal with prejudice, and the judgment "was unaccompanied by findings and hence did not bind the parties on any issue." See Gambocz v. Yelencsics, 468 F.2d 837, 842 (3d Cir. 1972).
Three elements are necessary to a finding of res judicata : (1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies and (3) a subsequent suit based on the same causes of action. United States v. Athlone Industries, Inc., 746 F.2d 977, 983 (3d Cir. 1984) (citations omitted). Chem Waste asserts, and the court agrees, that defendants have not borne their burden of proof with respect to the second and third elements of this standard. Accordingly, summary judgment on this ground must be denied.
First, and foremost, there is no identity of parties or their privies in the initial action and the instant case. In the first action Chem Waste sued the Metzval parties; in this action, Chem Waste has sued generators of waste deposited at the Lyncott facility, none of which was a party or in privity with a party to the first action. Defendants attempt to overcome this hurdle by asserting that the Court of Appeals for the Third Circuit has broadened the availability of res judicata to persons who might have been, but were not, named in the initial action. See Bruszewski v. United States, 181 F.2d 419 (3d Cir.), cert. denied, 340 U.S. 865, 95 L. Ed. 632, 71 S. Ct. 87 (1950). Thus, defendants argue, res judicata prohibits Chem Waste "from asserting essentially the same claim against different defendants." See Gambocz, 468 F.2d at 841; Bruszewski, 181 F.2d at 422; Avins v. Moll, 610 F. Supp. 308, 316 (E.D. Pa. 1984), aff'd, 774 F.2d 1150 (3d Cir. 1985).
The court therefore must determine whether the "claims" Chem Waste asserted against the Metzval parties are essentially the same as the claims asserted in the instant case. This inquiry turns on the third res judicata factor: whether the subsequent suit is based on the same causes of action. In United States v. Athlone Industries, Inc., 746 F.2d 977 (3d Cir. 1984), the court of appeals set forth a four-factor test for determining when suits involve the same cause of action:
(1) Whether the acts complained of and the demand for relief are the same (that is, whether the wrong for which redress is sought is the same in both actions); (2) whether the theory of recovery is the same; (3) whether the witnesses and documents necessary at trial are the same (that is, whether the same evidence necessary to maintain the second action would have been sufficient to support the first); and (4) whether the material facts alleged are the same.