The opinion of the court was delivered by: YOHN
The Reading Company ("Reading") commenced a suit against defendants under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended, 42 U.S.C.A. §§ 9601-9675 and the Pennsylvania Hazardous Sites Cleanup Act ("HSCA"), 35 Pa. Cons. Stat. Ann. §§ 6020.101-6020.1305. Reading seeks contribution from defendants for their share of the $ 8.6 million in clean-up costs already incurred by it, as well as any future costs incurred, in removing polychlorinated biphenyls ("PCBs") from the viaduct which formerly bore tracks of the Ninth Street branch of the Reading Railroad to the Reading Terminal train shed, the Reading Terminal train shed, the structures associated with that train shed, the structural components of the train shed, and the interstitial materials lying between the floor of the train shed and the ceiling of the Reading Terminal Market. Defendants SEPTA, Conrail, Bucks County, Chester County, and Montgomery County
have filed a motion for summary judgment on all claims asserted against them. For the reasons explicated below, the court denies the motion for summary judgment.
This case involves an enormous number of facts. Therefore, in an effort to achieve clarity, the court subdivides the pertinent facts.
Reading operated both freight and passenger rail service. Its passenger service was extant in 1893 and perhaps earlier.
For many years, Reading ran steam-powered locomotives on its passenger lines. Around 1930, Reading commenced electrification of its rail lines. The company electrified the last of its passenger lines in 1961.
Reading utilized self-propelled electric railroad cars on the electrified rail lines. The electric railcars housed traction motors that in turn contained electrical transformers. These electrical transformers contained oils mixed with PCBs.
Due to the normal operation of these transformers and to leaks in them, the transformers released PCBs into the railbeds underneath them. As a result of the releases of PCBs, the train shed (including the Reading Terminal train shed, the structures associated with that train shed, the structural components of the train shed, and the interstitial materials located between the floor of the train shed and the ceiling of the Reading Terminal market) and the viaduct that formerly bore the tracks of the Ninth Street branch of the Reading Railroad to the train shed became contaminated.
During the 1950's, Reading suffered a severe decline in the number of passengers using its commuter rail lines. This decline in riders placed the continued existence of commuter rail operations between Philadelphia and the nearby counties of southeastern Pennsylvania in jeopardy.
In response to the threatened discontinuance of commuter service between Philadelphia and the surrounding counties, in 1958, the City of Philadelphia (the "City") entered into a series of contracts with Reading to increase service and decrease fares on selected rail lines, mostly within the city. By the end of 1960, the City created the Passenger Service Improvement Corporation ("PSIC") to manage the plan to increase service and decrease fares on the six in-city rail lines.
Realizing that the burgeoning mass transportation crisis necessitated a regional approach to the problem, in September 1961, Bucks, Chester, and Montgomery Counties joined with the City to form the Southeastern Pennsylvania Transportation Compact ("SEPACT"). SEPACT planned to increase ridership on commuter rail lines by increasing the quality and quantity of service and decreasing fares.
SEPACT applied for and received a demonstration grant from the Housing and Home Finance Agency ("HHFA") (later replaced by the Urban Transportation Administration under the U.S. Department of Housing and Urban Development) pursuant to the Housing Act of 1961. The first demonstration project, christened SEPACT I, commenced during the last week of October 1962 and lasted for three years, ending in October 1965. The project cost $ 4.7 million, two-thirds of which was paid for by the federal government and the remaining one-third of which was contributed by the local participants.
Although SEPACT I successfully increased ridership on the demonstration lines, overall the volume of commuters riding on the Reading system declined. Because of the continued passenger deficit, Reading applied for service abandonments.
In response to the escalating mass transportation crisis, SEPACT III, known as Operation Reading, evolved. This project's goal was to increase ridership on all seven of Reading's commuter lines. Operation Reading commenced in April 1965 and terminated in October 1966.
In 1964, the Southeastern Pennsylvania Transportation Authority ("SEPTA") formed. Incorporated pursuant to the Urban Mass Transportation Law, SEPTA was created as an agency of the Commonwealth of Pennsylvania, although it was subsidized by a number of sources. In November 1965, SEPTA assumed management of SEPACT's programs thereby becoming SEPACT's managing agent.
Reading subsequently went bankrupt and in 1976, pursuant to a final system plan required by the Regional Rail Reorganization Act, conveyed most of its property to Conrail. However, it retained a reversionary interest in certain property. Reading ceased all railroad services on March 31, 1976. When the properties in question reverted back to Reading in 1985, Reading began to clean up the PCB contamination.
Ownership and operation of Reading Terminal
Reading constructed the Reading Terminal in 1893 as part of its passenger operations. Part of the Reading Terminal complex was a structure known as the train shed. The train shed contained 13 trackbeds and a number of passenger walkways and loading platforms. Trains would travel in and out of the shed to pick up and deposit passengers.
The train shed, covered by an arched roof supported by steel framing, was completely open at its north end thereby enabling trains to travel in and out of the shed. Reading Terminal Market was situated directly underneath the train shed. Located between the floor of the train shed and the ceiling of the market was an area known as the interstitial space. The interstitial space housed support beams and a stormwater drainage system.
Outside the train shed was an area known as the viaduct. The viaduct was an open, elevated masonry structure that bore tracks of the Ninth Street branch of the Reading Railroad. In order to reach the shed, trains passed over the viaduct.
Between 1893 and April 30, 1976, Reading owned and operated the train shed, including structures associated with that train shed, structural components of the train shed, and interstitial materials lying between the floor of the train shed and the ceiling of Reading Terminal Market. In addition, Reading also owned and operated the viaduct. Proposed Stipulation P A1, Reading Exh. 1.
In 1971, Reading filed for bankruptcy. Congress passed the Regional Rail Reorganization Act in 1973. Under the act, a final system plan was developed and promulgated in 1975. According to the final plan, the operations of a number of bankrupt railroads were melded to create regional rail systems in the northeast and midwest. To that end, the Consolidated Rail Corporation ("Conrail") was created and assets of bankrupt railroads were transferred both to Conrail and to some solvent railroads. Id. P A2.
On March 29, 1976, pursuant to the final system plan, Reading conveyed to Conrail an option granting Conrail the right to acquire, on behalf of SEPTA, interests in certain of Reading's property, including the existing track, track structure, supporting structure, and rail operating facilities at the terminal. Id. P A7. Conrail exercised its option and on May 3, 1976, conveyed the interest to SEPTA by deed. Reading retained a reversionary interest in the property transferred to Conrail and subsequently to SEPTA. Reading's reversionary interest was to take effect six months after the planned Center City Commuter Tunnel between the former Reading commuter system and the Penn Central commuter system became operational.
From April 1, 1976, until December 31, 1982, Conrail, employing electric railcars owned by SEPTA, the City, and Reading, operated the passenger rail service at Reading Terminal. Id. P B13. From January 1, 1983, until November 11, 1984, SEPTA operated passenger rail service at Reading terminal and utilized electric railcars owned by it and the City.
Id. P B14. All rail operations at Reading Terminal ceased on November 11, 1984, when the Center City Commuter Tunnel became operational. Since the tunnel linked Reading's former lines and Penn Central's lines north of the Reading Terminal, the terminal became obsolete. On May 12, 1985, six months after rail operations at the terminal ceased, Reading regained ownership of the rail facility, pursuant to the reversionary interest set forth in the 1976 conveyance agreement between it and Conrail.
On November 9, 1990, Reading sold the train shed to the Redevelopment Authority of the City of Philadelphia ("RDA"). On that same date, Reading transferred the Reading Terminal Market to the Pennsylvania Convention Center Authority. Later, on February 14, 1991, Reading sold the viaduct south of Vine Street to the RDA. Reading continues to own the portion of the viaduct north of Vine Street. Id. P A14.
Cause of the PCB contamination
Overhead catenaries power self-propelled electric railcars. The power propels the cars and provides the energy for auxiliary systems such as heating and lighting. The catenaries on the Reading lines carried 11,000 volt currents of electricity. However, the railcars required lower voltage in order to operate. Each railcar required a transformer to reduce the voltage of the electric current from 11,000 volts to an appropriate level. Report by A.J. Giampaolo on the Operation and Performance of PCB Transformers on Silverliner II and IV Cars at 1, Reading Exh.5.
As might be expected, transformers generate a sizable amount of heat. Transformers, therefore, contain cooling systems, either blower-driven air or pump-driven liquid.
During the pertinent time period, liquid cooling systems contained either mineral oil or PCB based fluids. Because of the dielectric and fire resistant properties of PCB based fluids, the use of such fluids was favored on railroad equipment. Id. at 2.
As a result of the design and normal operation of the equipment, maintenance activity, component failures related to improper or inadequate maintenance, and unforeseen environmental conditions, PCB containing coolant can be emitted from transformers. Id. at 6-8.
Reading maintains that railcars owned and operated by defendants released PCBs into the trackbeds during their normal operation. These releases, known as "burps," occurred due to the operation of the transformers' pressure relief valves and safety relief valves. Giampaolo Report at 6, Stickel Deposition at 242, Reading Exh.120.
In addition to normal releases, Reading also contends that improper or insufficient maintenance caused leaks through cracks, valves, and deteriorating gaskets. Moreover, according to Reading, the improper functioning of component parts of the transformers, such as pumps, also caused leaks. Bahm Deposition at 224, Reading Exh.122, Giampaolo Report at 5-8, Reading Exh.5.
Finally, Reading contends that at least two PCB spills occurred at the train shed while Conrail and SEPTA operated the terminal. September 13, 1985 letter from John Jenchura to Eugene Cipriani; February 24, 1984 SEPTA Report, Reading Exh.7.
Ownership and operation of PCB -containing railcars
Railcars equipped with transformers cooled by fluids containing PCBs were first introduced to the Reading system around 1948. Around that time, Reading converted 20 passenger coaches into trailer cars to be used in conjunction with self-propelled electric railcars. The converted trailers housed electric equipment that required the installation of small, auxiliary transformers. These transformers contained PCBs. Reading operated these 20 cars both in the train shed and on the viaduct until sometime prior to April 1, 1976. Proposed Stipulation P B2, Reading Exh.1.
Around 1949, Reading purchased 8 electric self-propelled railcars equipped with PCB containing main transformers. Reading operated these railcars within the train shed and along the viaduct until the 8 railcars were retired sometime prior to April 1, 1976. Id. P B3.
Around 1963, Reading began to operate 17 "Silverliner II" self-propelled electric railcars in the train shed and along the viaduct. These cars were equipped with main transformers cooled by fluids containing PCBs. The City owned the 17 railcars and leased them to Reading pursuant to an agreement dated November 9, 1962. Reading maintained and regularly ran these railcars until March 31, 1976. Id. P B4.
Commencing in 1974, Reading operated 14 "Silverliner IV" self-propelled electric railcars. SEPTA owned the 14 railcars and leased them to Reading pursuant to an agreement dated October 11, 1971. Not surprisingly, these cars were also equipped with main transformers cooled by fluids containing PCBs. Reading maintained these railcars and regularly operated them within the train shed and along the viaduct until March 31, 1976. Id. P B6.
An additional 88 "Silverliner IV" railcars were ordered for use on Reading's commuter lines. Eight of these cars were delivered in 1975, while the remainder were delivered between 1976 and 1977. These railcars also housed main transformers cooled by fluids containing PCBs. Car numbers 123-182 inclusive were owned by the City. SEPTA owned car numbers 101-122 inclusive and 183-188 inclusive. Reading maintained these railcars and regularly ran them in the train shed and along the viaduct until March 31, 1976. Id. P B7.
Around April 30, 1976, Reading executed a bill of sale that conveyed to Conrail passenger railcars owned by Reading. Simultaneously, Reading also conveyed to Conrail its interests in any lease agreements involving railcars. Id. PP B9,B10.
Also on April 30, 1976, SEPTA purchased 172 used commuter railcars, 168 of which were electric, from Conrail. This conveyance included the transfer of 93 passenger railcars originally conveyed by Reading to Conrail. Id. P 11.
From April 1, 1976, until December 31, 1982, Conrail operated passenger rail service at Reading Terminal and utilized electric railcars owned by SEPTA, the City, and Reading. Conrail maintained the railcars during this period. Id. P 13.
Except during a 108 day strike by rail workers, SEPTA ran passenger service from Reading Terminal between January 1, 1983 and November 11, 1984. SEPTA utilized electric railcars owned by itself and the City. SEPTA maintained the railcars during this period. Id. P 14.
Discovery of contamination and subsequent clean-up operations
Reading first became aware of PCB contamination in the Reading Terminal in September 1983. In preparation for the reversion of its property, Reading hired Stablex-Reutter, Inc. ("Stablex-Reutter") to test for the presence of PCBs at the terminal and the tracks leading up to the terminal from the viaduct. The testing revealed that PCBs were in fact present.
September 20, 1983 Stablex-Reutter Report, SEPTA Exh.1.
In light of this discovery, in May 1984, Reading's attorney for environmental issues notified the regional administrator of the Environmental Protection Agency's ("EPA") Region III Office and the secretary of the Pennsylvania Department of Environmental Regulation ("DER") of possible PCB contamination. May 31, 1984 letter from David Marston to Nicholas Benedictis and May 31, 1984 letter from David Marston to Thomas Eichler, Reading Exhs. 8,9. Within these letters, Reading noted its belief that "neither the reorganized Reading Company nor its subsidiaries have any legal responsibility for conditions on the aforesaid sight." Id. Moreover, because it was not currently operating the commuter lines, Reading maintained that it was "not in a position to initiate the formal notification or clean-up activities which might otherwise be appropriate in these circumstances." Id.
On January 28, 1985, Reading informed SEPTA that it had authorized a comprehensive study of the PCB problem and that it expected SEPTA and Conrail to share the costs of the study. January 28, 1985 letter from Richard Kaplinski to Joseph Mack at 2-3, Reading Exh.12.
In March 1985, the City, through the Philadelphia Industrial Development Corporation ("PDIC"), commissioned an investigation of the PCB problem by WAPORA, Inc. in connection with the proposed Convention Center. March 15, 1985 letter from David Marston to Marilyn Kutler, Chief Deputy City Solicitor, Reading Exh. 13. Instead of conducting its own study, Reading participated jointly with the PDIC in the WAPORA study. Id. Again on March 12, 1985, Reading requested that SEPTA participate in the investigation and cleanup. March 12, 1985 letter from Richard Kaplinski to Joseph Mack, Reading Exh.14. SEPTA declined to assume any responsibility for the PCB contamination. March 27, 1985, letter from Joseph Keener to Richard Kaplinski, Reading Exh.16.
Similarly, the City accepted no responsibility for the PCB contamination. March 22, 1985 letter from Gerald Maier to William Hankowsky, Reading Exh.17. Reading also requested that Conrail become involved in the investigation and clean-up process. Marston Dep. at 70-74, 153-55, Reading Exh.116. According to Reading's lawyer, David Marston, Conrail maintained that the contamination was SEPTA's concern. Id. However, he noted that Conrail stated that if a joint proposal for addressing the PCB contamination were presented to it, it would consider whether it made sense for it to participate in such a joint plan. Id. According to Marston, no joint plan was submitted to Conrail because Reading believed that there was insufficient interest in participation by Conrail to warrant any such efforts. Id. Dr. Anthony Moscati, who ran the WAPORA investigation, stated that Conrail flatly refused "to become involved in the investigation and cleanup process." Moscati Dep. II at 82, Reading Exh. 118.
In May 1985, when Reading reacquired ownership of the terminal property, it hired WAPORA to continue investigating and to identify possible clean-up methods. Declaration of Dr. Anthony Moscati P 3, Reading, Exh.104. In the course of its study, WAPORA determined that PCBs had migrated downward from the floor of the train shed to the interstitial space and finally to the ceiling of Reading Terminal Market. Moscati Declaration P 5, Reading Exh. 104, WAPORA's Final Report on Stabilization of PCB-Bearing Oil Deposits within the Interstitial Space Above the Reading Terminal Market at 1, Reading Exh.2, Photographs produced at the Deposition of Frank Aceto, Reading Exhs. 80-84.
In June 1985, WAPORA, with EPA approval, stabilized the oily PCB deposits in the southwest corner of the interstitial space and in the market. Moscati Decl. P 11. These stabilization activities included gathering the contaminated material and either landfilling or incinerating it. During December 1985 and January 1986, O.H. Materials ("OHM") conducted similar stabilization activities throughout the interstitial space.
Little or no physical clean-up activities occurred between January 1986 and February 1989. The bulk of Reading's clean-up activities were conducted between February 1989 and February 1991.
In November 1985, Reading and WAPORA were informed by Edward Cohen of the EPA that Reading's cleanup should be in compliance with the Toxic Substance Control Act PCB Spill Cleanup Policy. Moscati Decl. P 13, Reading Exhibit 104. Apparently, Reading and WAPORA never dealt with any of the EPA's CERCLA enforcement sections. Although Mr. Cohen was assigned to EPA Region III's TSCA Enforcement Office, he was also the region's designated contact person for those conducting cleanup of Superfund sites with PCB contamination. EPA's Guidance on Remedial Actions for Superfund Sites with PCB Contamination, OSWER Directive N. 9355.401, August 1990 at Appendix E, Reading Exh.34.
In August 1985, Reading submitted a number of documents to the EPA including the WAPORA Market and I.S. (interstitial space) Study (Reading Exh.19) and the WAPORA Shed and Viaduct Study (Reading Exh.3). In 1986, Reading submitted a proposed clean-up plan to the EPA. This plan was entitled the Reading Terminal Viaduct, Shed, and Interstitial Space PCB Contamination Cleanup Plan. Reading, Exh.37.
In June of 1988, Reading notified the EPA's Mr. Cohen that actual cleanup of the train shed was to begin in accordance with the 1986 WAPORA plan previously submitted to the agency. June 2, 1988 Letter to Edward Cohen, SEPTA, Exh.11. The EPA requested that Reading make several revisions to its plan. SEPTA, Exhs.12,13.
During this period of negotiating with the EPA, Reading began to solicit bids and proposals in connection with the planned cleanup. Reading retained Chester Engineers to oversee the cleanup by Reading's chosen contractor, Remediation, Inc. Reading also entered into contracts with Chemical Waste Management and ENSCO for the transportation and disposal of PCB contaminated materials removed from the Reading facilities.
Finally, on August 16, 1991, the EPA stated that there was no indication of "need for further decontamination" at the present time. Letter from John Ruggero, Chief TSCA Enforcement and TRI Section, Reading Exh. 25. However, the EPA did "not waive any of its enforcement rights under any statute in relation to the PCB cleanup at this site." Id.
Reading still owns the portion of the viaduct north of Vine Street. PCBs remain in that portion of the viaduct.
CERCLA permits private parties to bring cost recovery suits against statutorily defined responsible parties for the costs that they have incurred in cleaning up hazardous substances. 42 U.S.C.A. § 9607(a)(4)(B); Philadelphia v. Stepan Chem. Co., 544 F. Supp. 1135 (E.D. Pa. 1982).
(1) the defendant comes within one of the four classes of "covered persons" identified in § 9607(a)(2), (2) there is a release or threatened release of hazardous substances from a facility, (3) the release or threatened release caused the plaintiff to incur response costs, (4) the costs incurred were the necessary costs of response, and (5) the response costs incurred were consistent with the national contingency plan.
42 U.S.C.A. § 9607(a), Artesian Water Co. v. Government of New Castle County, 659 F. Supp. 1269, 1278 (D. Del. 1987), aff'd 851 F.2d 643 (3d Cir. 1988). Section 9601 defines many of the terms used above. 42 U.S.C.A. § 9601.
If a party is determined to be a responsible party and the other required elements are present, then liability is strictly imposed. U.S. v. Alcan Aluminum Corp., 964 F.2d 252, 259 (3d Cir. 1992); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146, 1150 (1st Cir. 1989); New York v. Shore Realty Corp., 759 F.2d 1032, 1042 (2nd Cir. 1985).
III. Standard for Granting Summary Judgment
Summary judgment is appropriate if there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir. 1980). The court does not resolve questions of disputed fact, but simply decides whether there is a genuine issue of fact which must be resolved at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); Ettinger v. Johnson, 556 F.2d 692 (3d Cir. 1977). The facts must be viewed in the light most favorable to the opposing party, and reasonable doubt as to the existence of a genuine issue of material fact is to be resolved against the moving party. Continental Insurance Co. v. Bodie, 682 F.2d 436, 438 (3d Cir. 1982). However, "there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted). The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury, or whether it is so one-sided that one party must prevail as a matter of law. Id. at 252.
IV. Relationship Between CERCLA and TSCA
SEPTA makes a number of arguments related to the Toxic Substance Control Act ("TSCA"), 15 U.S.C.A. §§ 2601-2671 (West 1982 & 1993 Supp.). In order to evaluate these arguments, the court will briefly summarize the portions of TSCA pertinent to this motion.
Congress passed TSCA in 1976, four years before CERCLA's passage in 1980. The purpose of the legislation was to "regulate chemical substances and mixtures which present an unreasonable risk of injury to health or the environment, and to take action with respect to chemical substances and mixtures which are imminent hazards." 15 U.S.C.A. § 2601(b)(2). In that vein, the statute outlawed the manufacture, processing, distribution, or use of PCBs "in any manner other than in a totally enclosed manner." 15 U.S.C.A. § 2605(e)(2)(A). However, TSCA also authorized the EPA to issue a rule allowing the manufacture, processing, distribution, or use of PCBs in other than a totally enclosed manner if the EPA found that the activity in question did not "present an unreasonable risk of injury to health or the environment." 15 U.S.C.A. § 2605(e)(2)(B).
Pursuant to this statutory authority, the EPA issued a rule authorizing, subject to certain conditions, the use of PCBs in railroad transformers. The Code of Federal Regulations states:
40 C.F.R. § 761.30(b) (1991). Furthermore, the EPA recognized that spills and leaks of PCBs were incidental to the use of such transformers:
Through normal operation of railroad cars, certain concentrations of PCBs in dielectric fluid are frequently spilled onto railroad beds. These spills can occur as a result of overheating or electrical failure in the transformers and of damage to these transformers from rocks and debris on the railroad bed.
TSCA does contain enforcement provisions. However, TSCA, unlike CERCLA, does not create a private right of action authorizing a private party to recover response costs from other responsible parties.
In an attempt to ward off the potential imposition of CERCLA liability, SEPTA talismanically cites TSCA throughout its papers. The attempt fails.
CERCLA liability may be imposed for activity authorized under TSCA
SEPTA contends that the EPA's authorization, pursuant to TSCA, of the use of PCB containing transformers on railcars insulates it from CERCLA liability. The court disagrees.
No conflict exists between the two statutory schemes. CERCLA, the later of the two statutes, expressly states that liability under the statute may be imposed upon a covered person "notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section." 42 U.S.C.A. § 9607(a). This statutory language indisputably evidences Congress' intention to prohibit implied exclusions from or exceptions to CERCLA liability.
Courts considering whether another environmental statute, the Resource Conservation and Recovery Act ("RCRA"), creates an exception to CERCLA liability have concluded that it does not. See, e.g., Accord Mardan Corp v. C.G.C. Music, Ltd., 600 F. Supp. 1049, 1054 (D. Ariz. 1984), aff'd, 804 F.2d 1454 (9th Cir. 1986) ("That CERCLA was intended to operate independently of and in addition to RCRA is indicated by the first clause of Section 107 of CERCLA which provides 'Notwithstanding any other provision or rule of law ... [liability may be established]."); United States v. Rohm and Haas Co., 790 F. Supp. 1255, 1262 (E.D. Pa. 1992) ("The overwhelming evidence is that Congress intended CERCLA to be cumulative and not merely an alternative to RCRA. . . . There is no statutory expression that would prevent EPA from recovering costs incurred in supervising a so-called RCRA managed site. . . . Without a clear statutory statement to the contrary, this CERCLA remedy must be upheld as an available tool of environmental protection. The defense of an implied exclusion of CERCLA remedies, must, therefore, be rejected.")
A cleanup conducted under the auspices of TSCA does not automatically preclude ...