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H&H Holding, L.P. v. Lee

United States District Court, Eastern District of Pennsylvania

March 6, 2014

H&H HOLDING, L.P.
v.
CHI CHOUL LEE and HYE JA LEE

MEMORANDUM

NORMA L. SHAPIRO, J.

Plaintiff H&H Holdings, L.P. (“H&H Holdings”) filed an action for damages under the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6972, (“Count I”), the Pennsylvania Land Recycling and Environmental Remediation Standards Act, 35 P.S. § 6026.101 (“Count II”), and Pennsylvania contract law (“Count III”), against defendants Chi Choul Lee and Hye Ja Lee d/b/a Prez Cleaners (“Prez Cleaners”).[1] The court has federal question jurisdiction under 28 U.S.C. § 1331 and supplemental jurisdiction under 28 U.S.C. § 1367. The court previously dismissed the Count II claim under the Pennsylvania Land Recycling and Environmental Remediation Standards Act because the statute does not create a private cause of action.

Before the court is defendants’ motion for summary judgment. The court will grant summary judgment on Count I in favor of defendants because plaintiff has failed to establish imminent and substantial endangerment. The court will use its discretion under § 1367 to retain the contract law claim.

I. Background

H&H Holdings is a small corporation that owns the two-acre property at 1625 Haines Road, Levittown, Bristol Township, Bucks County, Pennsylvania. In 2010, H&H Holdings applied for a bank loan. As part of that loan application, National Capital Management contracted Barry Issett & Associates (“BIA”) to perform a Phase I Environmental Site Assessment (“Phase I”). At the time of the assessment, the property was a retail strip mall with eleven occupants, including Prez Cleaners, a local dry cleaning business owned and operated by defendants, Chi Choul Lee and Hye Ja Lee. ECF No. 14, Ex. P-1. Prez Cleaners, under the ownership of defendants, had operated as a dry cleaning establishment on the property since 1984. ECF No. 14, Ex. D-4. There had been a dry cleaning facility operating in that location since the site was constructed in the mid-1960s. ECF No. 14, Ex. P-1.

BIA, a structural and civil engineering firm, performed Phase I and submitted its report in July 2010. ECF No. 14, Ex. P-1. The purpose of the study was to identify recognized environmental conditions (“REC”) present on the property. Id.[2] Through government databases, BIA found Prez Cleaners was “a small quantity generator of hazardous waste, ”[3] and identified four other nearby sites investigated by the EPA or subjected to corrective action because of a release: Northeast Paint and Varnish Company, Childers Products, Safety-Kleen, and Printed Circuits, Inc. Id. BIA later determined these additional sites had minimal potential to impact the property. Id. BIA then performed a site observation of Prez Cleaners and reported it used and stored Tetrachloroethylene (also known as Perchloroethylene) (“PCE”), a chemical widely employed for dry cleaning fabrics and classified by the EPA as a likely human carcinogen. ECF No. 14, Ex. P-4 (Part 2). BIA stated Prez Cleaners placed its dry cleaning machine on a concrete slab and kept an additional 35-gallon drum of PCE next to the machine. ECF No. 14, Ex. P-1. Neither the machine nor the drum had a secondary container and BIA reported the “use of PCE for over 25 years with no secondary containment over a concrete floor in fair condition represents an environmental concern.” Id. The Prez Cleaners’ manager interviewed by BIA stated the machine used all the solvent in the cleaning process and no spent fluids remained to recycle. Id.

Based on these visual observations alone, the Phase I report categorized Prez Dry Cleaners as an REC, defined as

the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into the structures on the property or into the ground, ground water, or surface water of the property.

Id. The report then stated

[d]ue to the volatile nature of the chemicals used in the dry-cleaning process, they do not stain materials they come in contact with. Therefore, based upon visual observations alone, a release cannot be determined without sampling. . . The presence of dry cleaner utilizing hazardous chemicals is considered an REC that warrants further action.

Id. BIA made two recommendations: 1) completion of a soil boring and sampling program to determine if the use of the halogenerated solvents (i.e., PCE) have impacted the subsurface around the dry cleaning tenant space; and 2) storage of drums containing PCE on a secondary containment structure to prevent the spread of contamination in the event of a future release. Id.

In September 2010, National Capital Management commissioned a Limited Phase II Site Investigation (“Phase II”). BIA conducted the Phase II investigation on September 23, 2010, and July 7, 2011. ECF No. 14, Ex. P-2. In September, BIA installed five “Geoprobe borings in the asphalt around the exterior, rear door of the dry cleaning tenant space” in a total area of forty square feet. Id. BIA, installing the borings four feet below the surface and collecting two soil samples from each soil column, provided ten samples for laboratory analysis. BIA compared the concentration of PCE in the soil samples to the acceptable level of PCE based on the soil to groundwater numeric value of the Pennsylvania Department of Environmental Protection (“PA DEP”) Medium-Specific Concentrations for Organic Regulated Substances in Soil. Id. The PA DEP acceptable value, referred to as a state wide health standard (“SHS”), is no more than one half milligram of PCE for every kilogram of soil (.5mg/kg). Id. Four of the samples showed levels of PCE above the SHS. Id. The Phase II report recommended additional site characterization so that BIA could further quantify the potential PCE impact on the soil. Id. Plaintiff’s proffered expert, David Bell, performed both the Phase I and Phase II studies.

In July 2011, BIA implemented a second sampling plan and installed seven additional borings at the rear of the dry cleaning facility, including two borings actually inside the dry cleaning room where defendants used PCE. ECF No. 13, Ex. D-1. Of the twenty-eight tested samples, thirteen showed levels of PCE above .5mg/kg. ECF No. 14, Ex. P-2. BIA cautioned that the current site data would not provide a comprehensive analysis of the horizontal and vertical extent of PCE concentrations in the soil. ECF No. 13, Ex. D-2. The report raised the possibility of PCE moving gradually into the permeable bedding materials around the local utilities. BIA did not refer to any water samples or geological studies supporting this possibility. It suggested that, because of nearby water, sewer and gas utilities “additional sampling may be required to determine how far under the building pad and along utility lines the contaminant has reached.” Id. Prior to any potential remediation efforts, BIA recommended three steps: 1) H&H Holdings and its attorney meet with BIA to discuss the sampling results; 2) additional borings and soil sampling be conducted, both inside and outside the building; and 3) H&H Holdings file a Notice of Intent to Remediate with the PA DEP because remediation at the site would most likely be done under the Voluntary Cleanup Program. Id.

The Phase II investigation was the last sampling done on plaintiff’s property. A little over a year after the report from BIA on the Phase II investigations, plaintiff filed the instant action against the owners of Prez Cleaners. Since the filing, the lease between ...


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