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TWO RIVERS TERMINAL, L.P. v. CHEVRON USA

March 27, 2000

TWO RIVERS TERMINAL, L.P., PLAINTIFF,
V.
CHEVRON USA, INC., DEFENDANT.



The opinion of the court was delivered by: Caldwell, District Judge.

    MEMORANDUM

I. Introduction.

The plaintiff, Two Rivers Terminal, L.P., and the defendant, Chevron U.S.A., Inc. (CUSA), are litigating the responsibility for the cleanup of environmental contamination at a gasoline and fuel oil terminal near Duncannon, Pennsylvania.

The parties have made claims against each other under various federal and Pennsylvania environmental laws, as well as Pennsylvania common law. The plaintiff makes the following claims: (1) a claim under section 9607(a)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601-9675; (2) a claim under section 6021.1305(c) of the Pennsylvania Storage Tank and Spill Prevention Act (the Tank Act), 35 P.S. §§ 6021.101-6021.2104 (Purdon & Purdon Supp. 1999-2000); (3) claims under sections 6020.702, 6020.1101 and 6020.1115 of the Pennsylvania Hazardous Sites Cleanup Act (PaHSCA), 35 P.S. §§ 6020.101-6020.1305 (Purdon & Purdon Supp. 1999-2000); (4) common-law indemnity; (5) common-law contribution; and (6) a claim under 42 U.S.C. § 6972 (a)(1)(B), the Resource Conservation and Recovery Act of 1996 (RCRA), Pub.L. No. 94-580, 90 Stat. 2795 (codified in scattered sections of 42 U.S.C.).

The defendant has made the following claims: (1) a CERCLA claim under section 9607; (2) a common-law claim for breach of contract; (3) a claim under section 6020.701 of PaHSCA; (4) a claim for common-law contribution; (5) a claim for common-law indemnity; and (6) a claim under section 6021.1310 under the Tank Act. The defendant has also alleged 37 affirmative defenses.

We are considering the following motions: (1) the plaintiffs motion for partial summary judgment on the issue of liability; (2) CUSA's motion for summary judgment on Two Rivers' claims; and (3) CUSA's motion for summary judgment on its Tank Act counterclaim.

We will examine the summary-judgment motions under the well-established standard. See Showalter v. University of Pittsburgh Medical Center, 190 F.3d 231, 234 (3d Cir. 1999).

II. Background.

We provide a brief background here as to the parties and a history of the site while setting forth other facts in the sections that follow.

In or about 1960 or 1961, Chevron constructed and owned the Duncannon terminal near Duncannon, Pennsylvania. The terminal had six aboveground storage tanks (ASTs) and four underground storage tanks (USTs). One of the USTs was a transmix or slop tank. The terminal stored and distributed petroleum products, including gasoline, leaded gasoline, diesel fuel and fuel oils.

Chevron operated the Duncannon terminal as a petroleum storage and distribution center until 1985, ceasing those operations in that year. In 1986, it sold the facility to Cumberland Farms, Inc., along with all its other assets in the northeastern United States. Cumberland Farms never intended to operate or occupy the Duncannon terminal, never did so, and never stored petroleum products at the terminal. On October 21, 1991, after months of negotiation, Cumberland Farms sold the terminal to Two Rivers.*fn1 On December 4, 1991, Two Rivers accepted a delivery of fuel oil, and in December 1992, its only delivery of unleaded gasoline.

Tests have been performed at the terminal for environmental contamination. To make the sale to Cumberland Farms, CUSA contracted with ERM-Northeast, Inc. to perform a visual and olfactory review of the Duncannon terminal. ERM drilled four monitoring wells. In February 1986, it detected a hydrocarbon odor in water taken from MW-2 and in May 1986 it detected hydrocarbon odors in MW-2 and MW-4, but concluded that there was no evidence of hydrocarbon contamination in the soil or groundwater.

In December 1990, before buying the site, Two Rivers contracted with Benatec Associates to examine it. Benatec found hydrocarbon contamination of the soil and groundwater. In MW-4 excessive concentrations of the hydrocarbon benzene were found, along with detectable amounts of three other hydrocarbons, toluene, ethylbenzene, and p-xylene. (These four hydrocarbons are known together as the BTEX hydrocarbons, the most water soluble hydrocarbons and the ones that wash into the groundwater.)

Two Rivers had GeoServices, Ltd. examine the site again in October and November 1991, about one month after it had bought the property. This examination confirmed the presence of high levels of total petroleum hydrocarbons (TPH) and BTEX hydrocarbons in the soil and groundwater. The levels around the transmix tank indicated that a spill had occurred in that area.

There is evidence of a major gasoline spill at the site in 1973. One witness observed it coming out of the transmix tank and spreading to a pond about 75 yards away. There were several other releases of petroleum products at the Duncannon facility during Chevron's ownership and operation of it.

III. CUSA's Motion For Summary Judgment.

A. Two Rivers' Tank Act Claim.

1. The Statute of Limitations.

Contending that a two-year statute of limitations applies to a Tank Act claim, the defendant argues that Two Rivers' Tank Act claim is time barred. CUSA maintains that the plaintiff knew about its claim at the latest by October 31, 1991, the date the property was purchased, but did not file this suit until October 20, 1997, well in excess of the two-year period for pursuing this claim.

The Tank Act contains no explicit statute of limitations for a citizen suit under 35 P.S. § 6021.1305(c). In arguing for a two-year limitations period, CUSA points out that Pennsylvania has provided a two-year limitations period for a number of claims arising from injury to the person, personal property or real property, including a limitations period that appears to cover the statutory claim at bar: "[a]ny other action or proceeding to recover damages for injury to . . . property which is founded on negligent, intentional, or otherwise tortious conduct or any other action or proceeding sounding in trespass. . . ." 42 Pa.C.S. § 5524(7) (brackets added).*fn2

CUSA also points to section 5524(4) which more specifically provides a two-year limitations period for "an action for waste or trespass of real property" and to the two-year statute of limitations for a cause of action for nuisance, citing Dombrowski v. Gould Electronics, Inc., 954 F. Supp. 1006, 1013 (M.D.Pa. 1996); and Rohrbach v. AT & T Nassau Metals Corp., 888 F. Supp. 627, 632 (M.D.Pa. 1994). It asserts that Two Rivers' citizen-suit claim under § 1305(a) can be identified as a statutory claim for nuisance since the Tank Act provides that "[a] violation of this act or of any order or regulation adopted by the department or of permits issued by the department shall constitute a public nuisance." 35 P.S. § 6021.1304. Based on the similarities between the common-law claims and the Tank Act claim, it thus argues that plaintiffs Tank Act citizen-suit claim is also subject to a two-year statute of limitations.*fn3

In opposition, Two Rivers first argues that section 5524(7)'s two-year limitations period does not apply because CUSA likens Two Rivers' Tank Act claim to negligence, strict liability, nuisance or trespass claims. However, Two Rivers cannot sue CUSA under these common-law theories of relief because Two Rivers is the present owner of the Duncannon terminal and CUSA a former owner of the same property. Two Rivers cites in its support, among other cases, Philadelphia Electric Co. v. Hercules, Inc., 762 F.2d 303, 313-15 (3d Cir. 1985) (nuisance action only serves to resolve conflicts between neighboring and contemporaneous land uses); and Andritz Sprout-Bauer, Inc. v. Beazer East, Inc., 174 F.R.D. 609 (M.D.Pa. 1997) (owner of environmentally contaminated property cannot assert trespass claim against former owner). In Two Rivers' view, since these common-law tort theories do not apply to its case, it is improper to borrow the two-year statute of limitations applicable to them. Further, since Pennsylvania' s tort-law causes of action under the common law do not adequately deal with the problems of petroleum contamination, as evidenced by Pennsylvania's statutory response to those problems, statutes of limitation governing those actions will not sufficiently protect those harmed by petroleum contamination either.

Second, Two Rivers points to Buttzville Corp. v. Gulf Oil Corp., 25 Pa.D. & C. 4th 172, 1995 WL 808347 (1995), the only published opinion that discusses the limitations period for a Tank Act claim. Buttzville Corp. held that the 20-year statute of limitations in 35 P.S. § 6021.1314 (Purdon 1993) for PaDEP to initiate actions for civil or criminal penalties applies to a citizen-suit under section 6021.1305(c).*fn4 The court reasoned that since the statute allowed PaDEP 20 years to seek civil or criminal penalties, it was "logical to assume that the General Assembly intended the 20 year limitation for the `civil or criminal penalties' mentioned in section 6021.1314 to apply to private actions. . . ." Id. at 176-77.

Four factors buttressed this reasoning. First, the Tank Act contained no other limitations period. Second, the General Assembly intended the Tank Act "to be liberally construed to fully protect the health, welfare and safety of Pennsylvania's residents." Id. at 177. Third, in Centolanza v. Lehigh Valley Dairies Inc., 430 Pa.Super. 463, 635 A.2d 143 (1993), aff'd, 540 Pa. 398, 658 A.2d 336 (1995), the Pennsylvania Superior Court, in ruling that the corrective measures available to PaDEP (then PaDER) under the Tank Act were also available to private parties, signaled that private actions were not to be treated differently from agency actions. The common pleas court also stated:

Finally, we find it nonsensical that the General Assembly intended that an action by the Commonwealth must be brought within a 20 year period but that a private action would be governed by the two year statute of limitations, which is provided in 42 Pa.C.S. § 5524(4) for actions for waste or trespass of real property, as the additional defendant contends. We do not believe that a two year limitation for a private action under the STSPA would protect the health, welfare and safety of Pennsylvania's residents as fully as the General Assembly intended. For all these reasons, we conclude that the [Tank Act] provides a 20 year statute of limitations for a private action.

Id. at 177-78 (brackets added). See also Schatz v. Laidlaw Transportation, Ltd., 1997 WL 186339 (E.D.Pa. 1997) (dismissing tort claims as barred by the two-year statute of limitations but allowing Tank Act claim to proceed).

Third, Two Rivers argues that if section 6021.1314's 20-year limitations period does not apply, then there is no statute of limitations on its claim or, alternatively, the six-year catchall period in 42 Pa.C.S. § 5527 (Purdon Supp. 1999-2000) applies.*fn5 In support, the plaintiff asserts that its Tank Act claim seeks both tort and contract damages-tort damages for the diminution in the property value of the Duncannon site and "contract-type damages for contribution and indemnification." (Two Rivers' omnibus memorandum at p. 26 n. 21). Two Rivers then points out that the routine tort claim has a two-year limitations period (citing section 5524), and an indemnity claim a four-year limitations period (citing 42 Pa.C.S. § 5525) but that a contribution claim has a six-year statute of limitations, citing section 5527's catchall provision and Bednar v. Bednar, 455 Pa.Super. 487, 688 A.2d 1200 (1997) (action for contribution in a real-estate partition action is governed by a six-year statute of limitations).

In reply, CUSA contends that Two Rivers first argument is a non sequitur, that simply because Two Rivers could not have sued under common-law causes of action does not mean that the Tank Act claim cannot be treated like those actions and thus subject to their statute of limitations.

Next, it argues that Buttzville was erroneously decided for the following reasons. First, contrary to Pennsylvania law on the interpretation of statutes, the court added words to the statute, citing in part, Altieri v. Allentown Officers' and Employees' Retirement Board, 368 Pa. 176, 181, 81 A.2d 884, 886 (1951) ("What the legislature failed to include, a court may not add"); and Key Savings and Loan Ass'n v. Louis John, Inc., 379 Pa.Super. 226, 232, 549 A.2d 988, 991 (1988) ("this Court is without authority to insert a word into a statutory provision where the legislature has failed to supply it"). CUSA maintains that the court improperly re-wrote the statute to add a 20-year limitations period for citizen suits that is not present in the statutory language.

Second, CUSA asserts that the General Assembly, by failing to include citizen suits in section 6021.1314's 20-year limitations period, clearly intended that this lengthy period not apply to Tank Act citizen suits. CUSA points to the analogous provision in PaHSCA, enacted about a year before the Tank Act, which explicitly provides a 20-year statute of limitations not only for civil and criminal penalties but also for civil actions under PaHSCA as well. The PaHSCA provision states, in pertinent part:

Notwithstanding the provisions of any other statute to the contrary, actions for civil or criminal penalties under this act or civil actions for releases of hazardous substances may be commenced at any time within a period of 20 years from the date the unlawful conduct or release is discovered.

35 P.S. § 6020.1114 (Purdon 1993). CUSA contends that the absence of the clause "or civil actions for releases of hazardous substances" in the Tank Act counterpart to this PaHSCA section establishes the General Assembly's intent that a Tank Act civil action is not governed by the 20-year limitations period in section 6021.1314.

CUSA also attacks the Buttzville conclusion that it would be "nonsensical" to subject a private cause of action to a two-year period of limitations while allowing a governmental action a 20-year period. CUSA points out that the Commonwealth is often not subject to a limitations period at all unless specifically made so by legislation, see City of Philadelphia v. Lead Industries Ass'n, Inc., 994 F.2d 112, 118 (3d Cir. 1993), and that even under the Tank Act, PaDEP can bring certain actions at any time to abate a nuisance, 35 P.S. § 6021.1305(a) (Purdon 1993), or to enjoin violations of the Act, id. at section 1305(b), while only actions for civil penalties under 35 P.S. § 6021.1307 (Purdon 1993), and for criminal penalties under 35 P.S. § 6021.1306 (Purdon 1993), are subject to the 20-year limitations period.

CUSA also contends that Two Rivers' argument that no limitations period should apply ignores section 5524(7) which imposes a two-year limitations period on tort-based claims. CUSA asserts that Two Rivers' citizen-suit cause of action is such a claim because it seeks damages for the diminution of the site's value, a claim that CUSA contends sounds in tort. Among other things, CUSA also points out that the Pennsylvania Superior Court's description of a Tank Act violation in Centolanza, supra, 430 Pa.Super. at 478, 635 A.2d at 150, as evidence of negligence per se provides further support for calling it a tort remedy. Finally, CUSA argues that a Tank Act claim cannot be one for indemnity since indemnity claims become ripe only when one party has been required to pay money to a third party, citing Rubin Quinn Moss Heaney & Patterson, P.C. v. Kennel, 832 F. Supp. 922, 935 (E.D.Pa. 1993).

We agree with the defendant's position that a private Tank Act claim is essentially a tort. To begin with, the Tank Act's citizen-suit provision authorizes what can best be described as a tort claim akin to a common-law claim for nuisance; the Tank Act recognizes that a violation of the Act can be abated as a nuisance. See 35 P.S. § 6021.1305(a). Additionally, the factual underpinnings of a private claim under section 1305(c) (here a release of petroleum products into the land and water) are the equivalent of a common law cause of action for nuisance without the common-law limitations. See Philadelphia Electric Co., supra. In fact, a common-law cause of action for nuisance is a tort. Golen v. Union Corp., 718 A.2d 298, 300 (Pa.Super. 1998). Further, under the Pennsylvania Supreme Court's interpretation of the citizen-suit provision, a person injured by a violation of the Act can recover as damages the "costs of cleanup and diminution in property value." Centolanza, supra, 540 Pa. at 407, 658 A.2d at 340. At least the latter element of damages is recoverable under the common law of nuisance, see Golen, supra, 718 A.2d at 300, and probably the first as well. 28 P.L.E. § 48 n. 49 (1960).

Since section 6021.1305(c)'s private cause of action is a tort, we must look to 42 Pa.C.S. § 5524(7) for its statute of limitations. As noted, section 5524(7) provides a two-year statute of limitations for "[a]ny other action or proceeding to recover damages for injury to person or property which is founded on negligent, intentional, or otherwise tortious conduct or any other action or proceeding sounding in trespass. . . ." A private action under section 6021.1305(c) fits this description. Hence, a two-year period of limitations applies to a private Tank Act claim.

There is thus no need to rely on broad policy considerations or logical assumptions, as the Buttzville court did, in finding the appropriate limitations period. Pennsylvania law tells us what limitations period applies. We thus respectfully disagree with Buttzville's approach to the issue.

We also reject the plaintiffs position that the six-year catchall limitations period in section 5527 applies. To make this argument, Two Rivers asserts that its claim for contribution seeks contract damages. However, it cites no authority for this proposition and does not argue that CUSA contractually agreed to provide contribution. We therefore reject this position.

Having concluded that a two-year limitations period applies, we must decide if Two Rivers' Tank Act claim is time barred. CUSA asserts that at the latest Two Rivers' principals knew about the contamination at the Duncannon terminal by October 21, 1991, the date Two Rivers executed the contract to buy the terminal. Since this lawsuit was filed on October 20, 1997, well in excess of two years after the purchase, the Tank Act claim is time barred.

Two Rivers does not argue with these facts, and we agree with CUSA. As noted above, Two Rivers and Cumberland Farms negotiated over a number of months about the contamination at the site before the sale was made. In fact, in December 1990, Two Rivers contracted with Benatec Associates to examine the site for pollution. Two Rivers thus knew about the contamination if not its extent by October 21, 1991. Hence, its Tank Act claim is time barred.

Two Rivers argues that, if its Tank Act claim is barred by a two-year statute of limitations, then CUSA's Tank Act counterclaim is time barred as well. It points out that it had put CUSA on notice of a potential Tank Act claim in 1991 when Two Rivers told CUSA it was looking to it to remediate the site, but the counterclaim was not filed until January 1999, well in excess of two years later.

We agree with Two Rivers that CUSA's Tank Act claim is time barred too, although we believe a later date provides a stronger basis for starting the limitations period. In December 1995, Worldwide Geosciences tested a water sample for Land Tech, CUSA's environmental consultant. The sample was described as consisting of high-lead gasoline typically made before July 1985, but also of diesel fuel or "fuel oil derived hydrocarbons" that was "minimally biodegraded" and most probably with "an exposure time of less than seven years." This calculation places a potential diesel-fuel release at the site after CUSA left, as CUSA itself has argued. A counterclaim filed in January 1999 is thus well beyond the two-year limitations period. Hence, CUSA's Tank Act claim is time barred.*fn6

2. Retroactivity of the Tank Act.

CUSA also argues that Two Rivers' Tank Act claim fails because it attempts to reach conduct that occurred before the Act became effective and the Tank Act cannot be applied retroactively. CUSA ceased operations at the terminal in 1985 and sold it in 1986. The Tank Act became effective on August 6, 1989.

CUSA relies on the statutory language that allows a private cause of action when a defendant is "in violation of any provision of this act or any rule, regulation, order or permit issued pursuant to this act." 35 P.S. § 6021.1305(c) (emphasis added). It then argues:

Two Rivers cannot make that showing as a matter of law for the simple reason that CUSA cannot be "in violation of" a provision or rule under the Tank Act when it severed all interest in the Property over three years before there was any provision or rule to violate.

(CUSA's summary-judgment brief on Two Rivers' claims at p. 16-17).

To buttress this argument, CUSA cites cases analyzing similar statutory language in federal law and the law of other states. It starts with RCRA, whose citizen-suit provision also contains the "in violation" language as follows:

[A]ny person may commence a civil action on his own behalf —
(1)(A) against any person . . . who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this chapter . . .

42 U.S.C. § 6972 (a)(1)(A). The "in violation" language has led to rulings that RCRA does not apply to conduct occurring before RCRA's enactment. See Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1158-59 (9th Cir. 1989) (citing Gwaltney of Smithfield v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987)); Pennsylvania Real Estate Investment Trust v. SPS Technologies, Inc., 1995 WL 687003 (E.D.Pa. 1995); Petropoulos v. Columbia Gas, 840 F. Supp. 511, 514-15 (S.D.Ohio 1993). As Ascon Properties reasoned:

Ascon's second amended complaint alleged that Mobil's disposal ceased in 1972. RCRA was not enacted until 1976. Therefore, Mobil simply could not have been "in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this chapter," 42 U.S.C. § 6972 (a)(1)(A): there was no statute pursuant to which such a permit could have been effective at the time of Mobil's alleged acts.

866 F.2d at 1159. The defendant also cites Louisiana-Pacific Corp. v. ASARCO Inc., 24 F.3d 1565, 1578-79 (9th Cir. 1994), in which the Ninth Circuit relied on Ascon Properties to preclude retroactive application of a Washington State environmental law that contained an analogous provision to RCRA's citizen-suit section.

Additionally, CUSA points out that Pennsylvania does not permit retroactive application of a statute unless the General Assembly clearly and manifestly intends it. See 1 Pa.C.S. § 1926; Gehris v. Commonwealth, Department of Transportation, 471 Pa. 210, 214, 369 A.2d 1271, 1273 (1977) ("absent clear language to the contrary, statutes are to be construed to operate prospectively only"). It contends there is no language in the Tank Act specifying it should be applied retroactively. Hence, it cannot be applied here to CUSA's conduct before enactment.

The plaintiff counters by first arguing that the Tank Act is retroactive because it defines an "owner" of a UST, in part, as an owner of such tanks from a ...


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