United States District Court, Western District of Pennsylvania
March 21, 2000
UNITED STATES OF AMERICA, PLAINTIFF,
MARVIN PESSES, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Ziegler, Chief Judge.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
(1) This is a civil action for money damages and equitable
relief filed by the United States against 28 defendants for the
recovery of costs and expenses related to the treatment, removal
and disposal of hazardous substances at the Metcoa Radiation Site
located at Pulaski, Pennsylvania.
(2) Jurisdiction is based on 42 U.S.C. § 9607 and 9613(b), and
28 U.S.C. § 1331, 1345 and 1367. Venue is appropriate in this
court based on 28 U.S.C. § 1391(b).
(3) At all relevant times, Marvin Pesses was a major
shareholder of Metcoa, Inc. Pesses was an operator of the site
within the meaning of Section 107(a)(2) of CERCLA,
42 U.S.C. § 9607(a)(2), due to his substantial ownership of Metcoa and
because he exercised control over the operations of the company.
(4) The site was used by Metcoa between 1975 and 1983 to
process scrap metal, waste sludge, radioactive materials and
nickel cadmium batteries. Various metals were then removed from
these materials, and hazardous substances were stored at the site
before and after the materials were processed by Metcoa.
(5) In 1986, the Environmental Protection Agency determined
that approximately three thousand 55-gallon drums containing
hazardous substances, many leaking and deteriorating, were at the
site. These hazardous substances included cadmium, chromium,
copper, lead, magnesium, mercury, nickel, thorium and zinc, some
of which had been released into the air, soil and water. The site
also contained elevated levels of radiation.
(6) The United States incurred substantial response costs and
expended funds to investigate, stage, sample, stabilize and
secure the site. The instant civil action was filed by the United
States asserting that the defendants were jointly and severally
liable for the costs pursuant to Section 107(a) of CERCLA,
42 U.S.C. § 9607(a). Defendants then filed original and amended
third party complaints against 195 third party defendants.
(7) After extensive settlement negotiations, the United States
reached a settlement with various defendants and a consent decree
was signed by the court on June 19, 1997. Thereafter, the parties
were realigned, "cash out" parties were dismissed, and the
Settling Parties filed an amended complaint.
(8) The Settling Parties asserted various claims for
contribution against the non-settling parties based on CERCLA,
the Pennsylvania Hazardous Sites Clean-Up Act, 35 P.S. §
6020.101, and common law. On August 31, 1998, the district court
granted partial summary judgment for the Settling Parties at
Count II, based on Section 113 of CERCLA, on the issue of
liability against third party defendants, Bay Metal, Inc., ICC
Industries, Inc., Lake City, Inc., M. Berkowitz & Co., Inc.,
Molycorp, Inc., and Oregon Metallurgical, Inc. The motions of the
third party defendants for judgment were granted against the
Settling Parties at Counts I, III, V and VI of the amended
(9) The Settling Parties reached an amicable settlement with
the above third party defendants, with the exception of Bay
Metal, Inc. The action for contribution by the Settling Parties
proceeded to trial against Bay Metal before this member of the
(10) In this civil action for contribution based on Section 113
of CERCLA, each of the Settling Parties bear the burden of
establishing a reasonable basis for apportioning liability upon
Bay Metal, Inc., and the third party plaintiffs bear the burden
of proving the elements of their claims, including causation, by
a preponderance of the evidence. United States v. Alcan Aluminum
Corp., 964 F.2d 252, 270 n. 29 (3d Cir. 1992).
(11) The evidence preponderates that the Settling Parties
incurred $10,023,015.36 in site investigation and removal
(response) costs, which we find are recoverable, reasonable and
consistent with the National Contingency Plan and CERCLA,
42 U.S.C. § 9613.
(12) The settlement of claims embodied in the Consent Decree
was based primarily on the weight of the materials, toxicity and
contribution to the harm at the site. The settlement is fair,
reasonable and consistent with the public interest.
(13) The response costs incurred at the site arose in response
to and were caused by the processing of materials by Metcoa which
produced the commingled waste materials at the site. The response
actions were required and the evidence preponderates that the
response costs incurred cannot be apportioned separately based on
a particular type of metal.
(14) Various hazardous substances located at the site were
present due to the processing of materials by the Pesses Company
and Metcoa, and were purchased from sources which included Bay
Metal. U.S. v. Pesses, 794 F. Supp. 151, 154 (W.D.Pa. 1992).
(15) Hazardous substances at the site were metals entrained in
slag and dust which were discarded waste products of smelting
operations conducted by Metcoa. No discrete materials were
identified as belonging separately to any of the parties to this
civil action during the site investigation, studies and removal
activities. The slag and dust at the site after Metcoa's
processing were commingled into an indivisible mass of waste
(16) Metcoa originally possessed a license from the Nuclear
Regulatory Commission to handle radioactive materials during the
time of the transactions with Bay Metal and the license was a
(17) Pursuant to an administrative order issued by the EPA in
1990, some of the Settling Parties performed site investigation
and removal activities with respect to the hazardous substances
present at the site, while other Settling Parties performed
additional site stabilization in 1989 pursuant to an
administrative order on consent.
(18) The Settling Parties performed additional site
investigation and removal actions at the site pursuant to the
Consent Decree entered into with the United States and approved
by this Court in an order dated June 19, 1997.
(19) Pursuant to the Consent Decree, the Settling Parties
participated in removal of contaminants at the site and
reimbursed the United States for $1.95 million in past costs and
reimbursed other parties who performed the work.
(20) The costs incurred by the Settling Parties, which are
recoverable under CERCLA, are reasonable and consistent with the
National Contingency Plan. The recoverable costs are as follows,
preceded by the type:
(a) Reimbursement of EPA past costs pursuant to the
Consent Decree — $1,950,000;
(b) Administrative Order — GSX Laidlaw —
(c) Administrative Order — ENSR Constructors —
(d) Administrative Order — de maximus — $417,232.55;
(e) Consent Decree — CEC Consultants — $2,022,468.07;
(f) Consent Decree — OHM Consultants — $1,925,331.28;
(g) Consent Decree — WCX Consultants — $201,543.40.
(21) The evidence preponderates that the expenses total
(22) In its evaluation of the remediation requirements at the
site, the EPA considered the number of metals, including metals
which may have originated from materials sent to the site by Bay
(23) The metals targeted by the EPA for site investigation and
for clean-up included nickel, which was sold by Bay Metal to
(24) The evidence preponderates that, during the period of
operation of the site by Metcoa, Bay Metal was a substantial
contributor of metals leading to the classification of Bay Metal
as the sixth largest contributor (by weight) to the site of the
parties to this litigation.
(25) Other parties were found liable by the court although they
did not contribute nickel, cadmium or thorium to the site.
(26) Pursuant to a court sanctioned allocation development
process, TLI Systems, Inc. was retained to compile a database,
which included sales orders, purchase sheets, gate log entries,
material types, and assumed weights of materials. The assumptions
were based on the history and usage by companies involved at the
(27) Bay Metal did not dispute the weights or assumptions used
in the TLI database.
(28) TLI's database considered allocation factors which are
known as Gore Factors such as volume (by weight), site conditions
and toxicity of materials. The database reflects volumes (by
weight) of materials transported to the site. The database became
the basis of a settlement among the parties.
(29) Matthew Low prepared a database which considered the
relative contributions (by weight), and the fact that the removal
was performed due to the generation and commingling of waste
materials while Metcoa was processing the metals at the site. He
concluded that the database was a reasonable basis for the
allocation of the costs.
(30) The evidence preponderates that Bay Metal declined to
participate in any remediation work at the site, objected to the
entry of the Consent Decree by which other parties performed
remediation response actions at the site, and declined to
participate in the Consent Decree after the court determined that
Bay Metal was a liable party under CERCLA.
(31) Bay Metal failed to perform any due diligence with respect
to the operations of the Metcoa site such as (a) a representative
of Bay Metal only visited the site five years after the
transactions began; (b) Bay Metal never toured the site, (c) Bay
Metal failed to review or request information regarding the
Nuclear Regulatory Commission license; (d) Bay Metal failed to
contact either the Pennsylvania Department of Environmental
Protection, or the Department of Health concerning the site; and
(e) Bay Metal had no knowledge of the environmental compliance
reputation of the facility.
(32) Patrick O'Hara, an expert witness for Bay Metal,
acknowledged that materials at the site were commingled and
physically indivisible, thereby agreeing with the testimony for
the Settling Parties regarding the lack of divisibility and the
extensive commingling of hazardous substances present on the
site. In fact, Mr. O'Hara testified that he was unaware of any
materials removed from the site which did not include a mixture
of a variety of metals.
(33) In response to the testimony of Settling Parties'
witnesses Matthew Low and Kenneth Miller, Bay Metal presented
Patrick O'Hara and Kenneth Wise. Mr. O'Hara's testimony regarding
both site conditions and division of costs, included the
(a) Hazardous substances were commingled at the site
and could not be physically divided.
(b) In its orders and assessment of health risks at
the site, the EPA did not identify any risk based
upon whether a material was a "Hazardous Waste,"
the disposal of which is governed by the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et.
seq., but rather evaluated the risks associated
with the exposure to numerous substances at the
(c) During its evaluations, the EPA identified
numerous metals which were classified as hazardous
substances under CERCLA and reviewed exposure
scenarios associated with those metals in assessing
the risks at the site.
(d) Mr. O'Hara did not review, in connection with his
(i) The EPA's past costs;
(ii) The costs incurred by some of the Settling
Parties to comply with the 1990 administrative
(iii) Study and testing costs.
(34) Dr. Wise relied upon Mr. O'Hara's testimony regarding
disposal costs in developing a percentage of costs assignable to
Bay Metal. His opinion:
(a) Failed to refute or dispute either the weights
assigned to any parties in TLI's database or Mr.
(b) Failed to include a financial review of the EPA
costs or the costs incurred by some Settling
Parties with respect to the 1990 administrative
(c) Failed to consider any of the contributions of
any other parties at the site other than Bay Metal
and the alleged thorium contributors;
(d) Failed to consider the increase in volume of
wastes due to commingling;
(e) Did not consider the fact that the EPA added
nickel and cadmium to develop the health risk
(f) Did not review other companies' contributions as
to category of costs that fit within in his
calculation of a share for the so-called "nickel
(g) Was based in economic theory and not on any of
the Gore factors; and
(h) Advanced a theory that has not been judicially
accepted in any other CERCLA action.
(35) The burden of showing the divisibility of costs in a
CERCLA action is upon the party asserting a defense to liability.
United States v. Rohm and Haas Co., 2 F.3d 1265, 1280 (3d Cir.
1993). Bay Metal has failed to sustain its burden by a
preponderance of the evidence.
(36) The evidence preponderates that the response costs
incurred at the site arose in connection with the processing of
materials by the Pesses Company (Metcoa), which led to the
commingled waste materials at the site. The response actions were
necessary and the response costs are incapable of separate
apportionment by party based on a particular metal type.
(37) Bay Metal's proposed allocation is neither consistent with
its treatment of the parties nor reasonable because it advocates
an assessment for metal types, but does not consider the fact
that the materials were commingled and incapable of segregation.
(38) Bay Metal's proposed allocation is unreasonable because it
fails to consider the material types transported by other
companies, in spite of the fact that Bay Metal advocates that
allocation shares should be based on metal types.
(39) The evidence preponderates that, using the so-called Gore
factors of contribution to the harm, toxicity of the waste volume
(by weight), and cooperation with the government by the Settling
Parties, judgment must be entered against Bay Metal in the amount
of $1,495,267, with interest commencing on the date of this
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