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United States v. Sunoco

July 15, 2009

UNITED STATES OF AMERICA PLAINTIFF,
v.
SUNOCO, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Anita B. Brody, J.

MEMORANDUM

I. Introduction

The United States has filed suit against defendants Atlantic Richfield Company, et al. ("AR") and Sunoco, Inc. et al. ("Sunoco") under the Pennsylvania Storage Tank and Spill Prevention Act, 35 Pa. C. S. § 6021.101, et seq., ("Tank Act"),*fn1 the Pennsylvania Uniform Contribution Among Tortfeasors Act, 42 Pa. C. S. §§ 8321-8327 ("UCATA"), and the federal Declaratory Judgment Act, 28 U.S.C. § 2201(a). The United States also makes a claim against Sunoco under the Clean Streams Act, 35 Pa. Stat. § 691.401 ("CSA"). In this opinion, I address: C Document #200: The United States' Motion for Summary Judgment on the Statute of Limitations Defenses

C Document #202: Sunoco's Motion for Summary Judgment on the Statute of Limitations, Causation, the Clean Streams Act Claim, and Sunoco's Tank Act Counterclaim C Document # 204: Atlantic Richfield's Motion for Summary Judgment on the Statute of Limitations

The suit concerns petroleum pollution ("the Plume") allegedly emanating from a section of a South Philadelphia refinery known as the Point Breeze Processing Area ("Point Breeze"). ¶ 8.*fn2 Point Breeze is currently owned by defendant Sunoco (formerly "Sun Company," or "Sun") and was previously owned by defendant AR. ¶ 4, ¶ 9. The Plume allegedly migrated underground from Point Breeze and contaminated a nearby United States property called the Defense Supply Center Philadelphia ("DSCP property"). ¶ 11-14; 17-44. Pollution is allegedly still migrating from Point Breeze to the DSCP property. ¶ 47.

The United States detected the Plume in 1987 on the DSCP property and notified the predecessor agency of the Pennsylvania Department of Environmental Protection ("PADEP") of violations of state environmental regulations. ¶ 17. The United States first thought that the Plume came from a leaking fuel line of its own, but as early as March 31, 1988, The United States suspected that the Plume may have originated from an off-site source. (Pl.'s Opp. to Defts.' Mot's for Summ. J. Ex. 13). "In 1993, Sun Co., Inc. (R&M) and PaDEP entered into a Consent Order and Agreement ('1993 COA'), which required Sunoco to... address all potential off-site migration of contaminants." (Sunoco Mot. for Summ. J. ¶62). When the 1993 COA expired in 2003, the parties renewed the Consent Order and Agreement (the "2003 COA"). (Id. at ¶63). Under the 2003 COA, Sunoco is operating recovery and monitoring wells to ensure that no off-site migration is occurring.*fn3 (Id. at ¶66).

In 1995, Kemron-Versar, two independent contractors working together, investigated the source of the Plume and issued a Final Phase I Remedial Investigation/Feasibility Study for the Defense Personal Support Center, Philadelphia ("Kemron Study,") which said that "the single most likely potential source of the 54-acre free product plume at the DPSC is the Sun Oil Company refinery south yard...." (Pl.'s Opp. Ex. 24, at v).

In 1996, the United States and Sunoco entered into a Consent Order and Agreement (the "1996 COA") with PADEP to remediate the Plume together. ¶ 31. The 1996 COA is no longer in effect. ¶ 40. On December 10, 1999, following two years of arbitration, PADEP issued a Unilateral Administrative Order ("1999 UAO") requiring the United States to assume responsibility for the remediation. ¶ 40. The UAO was appealed by the United States to the Pennsylvania Environmental Hearing Board (EHB), which upheld the agency action. Id. The United States also sought review of the UAO in the Pennsylvania Commonwealth Court and the Eastern District of Pennsylvania. ¶ 42. Those matters settled with an agreement that the United States and PADEP would resolve future disagreements about the site through mutually agreeable dispute resolution. ¶ 42. Pursuant to the UAO, the United States has been remediating the Plume and anticipates that future remediation will be required. ¶ 43-44. It has already spent $22,000,000 on remediation. ¶ 75.

On January 26, 1996, the United States and Sunoco (then Sun Company, Inc.) entered into a tolling agreement (the "tolling agreement") regarding claims by the United States against Sunoco "associated with the presence, removal or remediation of any hydrocarbon contamination under the DPSC Facility." (Pl.'s Mot. for Partial Summ. J. Ex. 1, "tolling agreement" 1-2). This agreement tolled "[a]ll statute of limitations defenses, and any and all time-related defenses." (Id. at 2). The parties agreed that either party may terminate the tolling agreement by delivering a written notice of its intent to terminate through certified mail. The United States mailed a written notice of intent to terminate on September 9, 2005, and the tolling agreement was terminated on December 8, 2005. This case was filed on December 8, 2005.

II. Summary Judgment Standard

Summary judgment must be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Facts are material if they might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue exists when the evidence is such that a reasonable jury could return a verdict in favor of the non-moving party. Id. at 248-52.

Summary judgment is appropriate as a matter of law when the non-moving party has failed to make an adequate showing on an essential element of his case, as to which he has the burden of proof at trial. Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 804 (1999). To overcome a summary judgment motion, a plaintiff may not rely on allegations or denials; a plaintiff must set out specific facts showing a genuine issue for trial. Fed. R. Civ. P. 56(e).

III. Discussion

A. United States' and Sunoco's Cross-Motions for Summary Judgment on the Tank Act Statute of Limitations*fn4

I previously held that the United States' Tank Act claim for costs of abatement is subject to a six year statute of limitations and the United States' Tank Act claim for diminution of property value is subject to a three year statute of limitations.*fn5 (Doc. #107). The United States takes the position that neither of these claims accrued until October 26, 1993, when the Pennsylvania Superior Court interpreted the Tank Act to include a private right of action for cost recovery and damages for diminution in property value. (Pl's Mot. for Summ. J., 19).*fn6 Sunoco contends, however, that the Tank Act claims accrued when the United States knew the "essence of the right of action." (Sunoco Mot. for Summ. J., 33 (quoting United States v. Kass, 740 F.2d 1493, 1497 (11th Cir. 1984)). Sunoco further contends that under the "essence of the right of action" doctrine, the United States violated the statute of limitations.

Under the general federal statute of limitations I previously held to apply, the statute of limitations for the Tank Act begins to run "after the right of action accrues." 28 U.S.C. § 2415. I previously stated that "Pennsylvania law provides the rule of decision for determining the substantive entitlements of the Tank Act, [but] federal law determines the manner in which the federal statute of limitations applies." (Doc. #107, fn. 5).

A cause of action accrues when "it comes into existence." U.S. v. Lindsay, 346 U.S. 568, 569 (1954). A cause of action has been interpreted to come into existence "when all events necessary to state a claim have occurred.*fn7 " Chevron U.S.A., Inc. v. United States, 923 F.2d 830, 834 (Fed.Cir. 1991). A claim deriving from a statute cannot accrue before the statute has been enacted. In re Penn. Cent. Transp. Co., 944 F.2d 164, 168 (3d Cir. 1991) ("Paoli Yard").*fn8 The earliest possible date that the United States' Tank Act claims against Sunoco could accrue was the date the Tank Act was enacted, August 5, 1989.

In 1989, when the Tank Act was enacted, it contained an express private right of action to 'compel compliance' with the Act, but this phrase was not defined in the text of the statute, nor had any court interpreted its meaning. Centolanza v. Lehigh Valley Dairies, Inc., 658 A.2d 336, 340 (Pa. 1995) ("Centolanza II"). On September 28, 1992, the Court of Common Pleas, Lehigh County, held that no private right of action existed under the Tank Act.*fn9 Centolanza v. Lehigh Valley Dairies, Inc., 635 A.2d 143, 148 fn.3, fn. 4 (Pa. Super. Ct. 1993) ("Centolanza I"). On October 26, 1993, the Pennsylvania Superior Court reversed the trial court and held that the Tank Act provides a private right of action to compel compliance, which necessarily includes forcing corrective action to be taken, taking corrective action, and obtaining the costs of abatement. Centolanza I, 635 A.2d at 147-49. The Superior Court stated:

Compliance with the act includes, but is not limited to, compelling owners and operators to register their tanks, § 6021.503... take corrective action after an order of DER, § 6021.1302; pay costs of abatement to DER or authorized third parties to do so, § 6021.1302(b)...

Id. at 147-48

The Superior Court did not address whether a plaintiff could recover damages for diminution in property value under the Tank Act. On appeal of that decision, in May 1995, the Pennsylvania Supreme Court highlighted the Tank Act's lack of ...


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