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Trinity Indus., Inc. v. Greenlease Holding Co.

United States District Court, W.D. Pennsylvania

August 5, 2014

TRINITY INDUSTRIES, INC., TRINITY INDUSTRIES RAILCAR CORPORATION, Plaintiffs,
v.
GREENLEASE HOLDING COMPANY, Defendant

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For TRINITY INDUSTRIES, INC., TRINITY INDUSTRIES RAILCAR CORPORATION, Plaintiffs, Counter Defendants: Frederick W. Addison, III, LEAD ATTORNEY, Nolan C. Knight, Munsch Hardt Kopf & Harr, Dallas, TX; Leonard G. Ambrose, III, LEAD ATTORNEY, Ambrose Law Firm, Erie, PA.

For GREENLEASE HOLDING COMPANY, Defendant: Steven F. Baicker-McKee, LEAD ATTORNEY, Marc J. Felezzola, Mark K. Dausch, Babst, Calland, Clements & Zomnir, Pittsburgh, PA;

For AMPCO-PITTSBURGH CORPORATION, Defendant, Counter Claimant: Kevin L. Barley, Burleson Cooke, Canonsburg, PA; Paul D. Steinman, Eckert, Seamans, Cherin & Mellott, Pittsburgh, PA.

For GREENLEASE HOLDING COMPANY, Counter Claimant: Kevin L. Barley, Burleson Cooke, Canonsburg, PA.

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MEMORANDUM OPINION

Joy Flowers Conti, Chief United States District Judge.

I. Introduction

The instant action arises out of the contamination of real property caused by the use of hazardous substances and waste in connection with the operation of a railcar manufacturing facility. Pending before the court are cross-motions for summary judgment filed by the parties pursuant to Federal Rule of Civil Procedure 56. (ECF Nos. 143 & 151.) For the reasons that follow, each of those motions will be granted in part and denied in part.

II. Background

A. General

In 1910, Greenville Metal Products Company (" GMPC" ) purchased the North Plant, which is located in Mercer County, Pennsylvania. (ECF No. 224 ¶ ¶ 1-2.) The North Plant consists of thirty-four acres found within the Borough of Greenville. (ECF No. 223 ¶ 1.) GMPC started to operate the North Plant as a facility to manufacture railcars. (ECF No. 222 ¶ 1.) In 1914, GMPC became known as the Greenville Steel Car Company (" Greenville" ). ( Id. ¶ 2.) It was formally incorporated in Pennsylvania on December 31, 1924. (ECF No. 146-5 at 1.) In August 1937, Pittsburgh Forgings Company (" PFC" ) purchased all of Greenville's stock. (ECF No. 222 ¶ 3.) Ampco-Pittsburgh Corporation (" Ampco" ), a Pennsylvania corporation based in Pittsburgh, acquired PFC's stock in August 1979 and became Greenville's parent corporation. (ECF No. 224 ¶ 20.)

Trinity Industries, Inc. (" Trinity" ), is a Delaware corporation maintaining its principal place of business in Dallas, Texas. (ECF No. 1 ¶ 1.) Trinity Industries Railcar Corporation (" TIRC" ) and Waldorf Properties, Inc. (" Waldorf" ), are wholly-owned subsidiaries of Trinity. (ECF No. 223 ¶ 3.) Greenville and Trinity executed a purchase and sale agreement on December 9, 1986. (ECF No. 146-4.) Pursuant to the terms of the agreement, Trinity acquired

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the North Plant. (ECF No. 223 ¶ 4.) Greenville agreed to change its corporate name to something other than the " Greenville Steel Car Company." (ECF No. 146-4 at 26.) In February 1987, Greenville formally amended its articles of incorporation and changed its name to the " Greenlease Holding Company" (" Greenlease" ). (ECF No. 222 ¶ 13.) With Greenville's change of name to Greenlease, Trinity could operate the North Plant under the fictitious name of the " Greenville Steel Car Company." (ECF No. 1 ¶ ¶ 18-20; ECF No. 222 ¶ 50.)

After the acquisition, Trinity manufactured railcars at the North Plant. (ECF No. 222 ¶ 15.) These manufacturing activities continued until 2000, when Trinity's operations at the North Plant ceased. (ECF No. 223 ¶ ¶ 6-7.) In February 2004, Trinity sold the North Plant to Waldorf. (ECF No. 1 ¶ 22.) Waldorf continues to own the North Plant. (ECF No. 223 ¶ 2.) Although Greenlease continues to exist as a corporate entity, it constitutes only a shell holding company that does not engage in business or commercial activities. (ECF No. 222 ¶ 14.) Greenlease has no employees. ( Id.)

B. Environmental

In June 2004, the Environmental Crimes Section of the Pennsylvania Office of Attorney General's Bureau of Criminal Investigations commenced an investigation into waste disposal activities that had occurred at the North Plant. (ECF No. 146-7 at 2.) The purpose of the investigation, which resulted from a referral made by Mercer County District Attorney James P. Epstein,[1] was to determine whether the activities at the North Plant had been in compliance with Pennsylvania's Solid Waste Management Act (" SWMA" ), 35 Pa. Stat. § 6018.101 et seq. (ECF No. 146-7 at 2; ECF No. 146-8 at 1.) As a part of the investigation, Special Agent William F. Brown (" Brown" ) interviewed several former Trinity employees. (ECF No. 146-7 at 3-8; ECF No. 146-8 at 1-2.) Some of the individuals interviewed in connection with the investigation had also been employees of Greenville prior to Trinity's acquisition of the North Plant. ( Id.)

On March 24, 2006, an investigative grand jury recommended that criminal proceedings be instituted against Trinity. (ECF No. 146-7.) One week later, Brown filed an eleven-count criminal complaint against Trinity for alleged violations of the SWMA. (ECF No. 146-9.) Trinity was charged with three second-degree felonies and eight third-degree misdemeanors. ( Id. at 2-5.) Pursuant to the terms of a plea agreement executed on October 31, 2006, Trinity pleaded nolo contendere to five of the misdemeanor charges. (ECF No. 146-10.)

The SWMA established the Solid Waste Abatement Fund (" SWAF" ), which is administered for the " abatement or elimination of present or potential hazards to human health or to the environment from the improper treatment, transportation, storage, processing, or disposal of solid wastes," and for the enforcement of the applicable statutory provisions. 35 Pa. Stat. § 6018.701. On December 21, 2006,

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Trinity was sentenced in state court to pay a $200,000.00 fine. (ECF No. 146-11 at 1-2.) In accordance with the SWMA, the fine was to be paid into the SWAF. ( Id. at 1-2.) Trinity was required to reimburse Pennsylvania's Department of Environmental Protection (" DEP" ) for investigative costs totaling $54,502.55, and to contribute $50,000.00 to a nonprofit organization (or multiple nonprofit organizations) selected by the Attorney General of Pennsylvania. (ECF No. 146-10 ¶ ¶ 4-5; ECF No. 146-11 at 2.) In addition, Trinity was ordered to remediate all contamination on its property. (ECF No. 146-10 ¶ 7; ECF No. 146-11 at 2.) The orders entered by the Court of Common Pleas were consistent with the terms of the plea agreement. (ECF Nos. 146-10 & 146-11.)

On December 21, 2006, Trinity and the DEP executed a consent order and agreement pursuant to the Hazardous Sites Cleanup Act (" HSCA" ), 35 Pa. Stat. § 6020.101 et seq., the Land Recycling and Environmental Remediation Standards Act (" LRERSA" ), 35 Pa. Stat. § 6026.101 et seq., and the Administrative Code, 71 Pa. Stat. § 510-17.[2] (ECF No. 146-1.) Trinity agreed to pay a civil penalty in the amount of $50,000.00 and assumed certain obligations associated with the remediation of the environmental contamination of its property. (ECF No. 146-1 ¶ ¶ 6-8, 22.) The plea agreement incorporated the terms of the consent order by reference.[3] (ECF No. 146-10 ¶ 7; ECF No. 146-11 at 2.)

Trinity and TIRC commenced this action against Greenlease and Ampco (collectively, " defendants" ) on October 24, 2008, seeking redress under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (" CERCLA" ), 42 U.S.C. § 9601 et seq., the Resource Conservation and Recovery Act of 1976 (" RCRA" ), 42 U.S.C. § 6901 et seq., and the HSCA. (ECF No. 1 ¶ ¶ 32-92.) In addition to the statutory claims, Trinity and TIRC (collectively " plaintiffs" ) brought common-law claims grounded in theories of contribution and negligence per se. ( Id. ¶ ¶ 93-100.) The complaint contained requests for declaratory and monetary relief. ( Id. ¶ ¶ 32-100.) Defendants answered plaintiffs' complaint on December 19, 2008, and asserted counterclaims for contribution and indemnity under the CERCLA and the common law of Pennsylvania. (ECF No. 9 at 18-19, ¶ ¶ 1-8.)

On September 14, 2009, defendants moved for a judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). (ECF No. 28.) That motion was denied in a memorandum opinion and order dated January 29, 2010. (ECF No. 40.) Plaintiffs filed a motion for partial summary judgment on October 14, 2011. (ECF No. 96.) That same day, Greenlease and Ampco filed separate motions for summary judgment. (ECF Nos. 88 & 92.)

While the motions for summary judgment filed by the parties in this case were still pending, parallel claims asserted by plaintiffs in a separate action involving the South Plant, a related property, against Chicago Bridge & Iron Company (" Chicago Bridge" ) were dismissed. Trinity Industries v. Chicago Bridge & Iron Co., 867 F.Supp.2d 754 (W.D.Pa. 2012).

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On April 11, 2012, plaintiffs appealed the dismissal of those claims to the United States Court of Appeals for the Third Circuit. (ECF No. 131-1.) Five days later, plaintiffs requested that this action be stayed while the court of appeals was considering their appeal in the other case. (ECF No. 131.) On September 13, 2012, the court stayed all proceedings in this case until the rendering of the court of appeals' decision. (ECF No. 139.) The pending motions for summary judgment were all denied without prejudice. ( Id.)

On August 20, 2013, the court of appeals issued its decision and reinstated some of plaintiffs' claims against Chicago Bridge. Trinity Indus., Inc. v. Chicago Bridge & Iron Co., 735 F.3d 131 (3d Cir. 2013). The order staying the proceedings in this case was lifted shortly thereafter. Trinity and TIRC filed a new motion for partial summary judgment on October 30, 2013. (ECF No. 151.) That same day, Greenlease and Ampco filed separate motions for summary judgment. (ECF Nos. 143 & 147.) In a memorandum opinion and order dated May 2, 2014, the court granted Ampco's motion for summary judgment and denied the plaintiffs' motion for partial summary judgment with respect to the claims asserted against Ampco. (ECF Nos. 235 & 236.) Ampco is no longer a defendant in this action. (ECF No. 236.) The cross- motions for summary judgment concerning the claims brought against Greenlease are still before the court and will be resolved in this memorandum opinion.

III. Standard of Review

Summary judgment may only be granted where the moving party shows that there is no genuine dispute as to any material fact, and that a judgment as a matter of law is warranted. Fed.R.Civ.P. 56(a). Pursuant to Federal Rule of Civil Procedure 56, the court must enter summary judgment against a party who fails to make a showing sufficient to establish an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In evaluating the evidence, the court must interpret the facts in the light most favorable to the nonmoving party, drawing all reasonable inferences in that party's favor. Watson v. Abington Twp., 478 F.3d 144, 147 (3d Cir. 2007). The burden is initially on the moving party to demonstrate that the evidence contained in the record does not create a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 140 (3d Cir. 2004). A dispute is " genuine" if the evidence is such that a reasonable trier of fact could render a finding in favor of the nonmoving party. McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Where the nonmoving party will bear the burden of proof at trial, the moving party may meet its burden by showing that the admissible evidence contained in the record would be insufficient to carry the nonmoving party's burden of proof. Celotex Corp., 477 U.S. at 322. Once the moving party satisfies its burden, the burden shifts to the nonmoving party, who must go beyond that party's pleadings and designate specific facts by the use of affidavits, depositions, admissions or answers to interrogatories showing that there is a genuine issue of material fact for trial. Id. at 324. The nonmoving party cannot defeat a well-supported motion for summary judgment by simply reasserting unsupported factual allegations contained in that party's pleadings. Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989).

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IV. Jurisdiction and Venue

The court has subject-matter jurisdiction over the federal claims asserted in this case pursuant to 28 U.S.C. § 1331, 42 U.S.C. § 6971(a) and 42 U.S.C. § 9613(b). Supplemental jurisdiction over the state claims is predicated on 28 U.S.C. § 1367(a). Since there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, 28 U.S.C. § 1332(a)(1) supplies an alternative basis for the exercise of the court's subject-matter jurisdiction. Venue is proper under 28 U.S.C. § 1391(b), 42 U.S.C. § 6972(a) and 42 U.S.C. § 9613(b).

V. Discussion

In the opinion issued on May 2, 2014, the court concluded that plaintiffs could not hold Ampco directly or derivatively liable under the standards articulated by the United States Supreme Court in United States v. Bestfoods, 524 U.S. 51, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998). (ECF No. 235 at 10-27.) Plaintiffs' inability to establish that Ampco had violated the applicable statutory provisions necessitated the dismissal of the contribution and negligence per se claims asserted against Ampco. ( Id. at 27-29.) The court entered an order dismissing Ampco as a defendant in this action. (ECF No. 236.) The unresolved issues in this case concern only the dispute between plaintiffs and Greenlease.

A. The CERCLA Claims

In 1980 Congress enacted the CERCLA. Pub. L. No. 96-510; 94 Stat. 2767 (1980). The Supreme Court has described the CERCLA as " a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites." Key Tronic Corp. v. United States, 511 U.S. 809, 814, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994). Section 106(a) of the CERCLA, which is codified at 42 U.S.C. § 9606(a), permits the Attorney General to commence an abatement action " when the President determines that there may be an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility." Pub. L. No. 96-510, § 106(a); 94 Stat. 2767, 2780 (1980). A federal district court entertaining such an action may " grant such relief as the public interest and the equities of the case may require." 42 U.S.C. § 9606(a).

Section 107(a) of the CERCLA renders " four broad classes" of potentially responsible parties strictly liable for environmental contamination. Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 608-09, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009). That provision, which is codified at 42 U.S.C. § 9607(a), provides:

§ 9607. Liability
(a) Covered persons; scope; recoverable costs and damages; interest rate; " comparable maturity" date. Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section--
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another

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party or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence ...

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