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AMLAND PROPERTIES CORP. v. ALCOA

April 18, 1989

AMLAND PROPERTIES CORP., Plaintiff,
v.
ALUMINUM COMPANY OF AMERICA, Defendant/Third Party Plaintiff, v. TRI-TERMINAL CORP., EDITH MAIDMAN as Executrix of the Estate of Irving Maidman; DONALD STEINBERG, as Executor of the Estate of Irving Maidman; 700 RIVER ROAD REALTY, INC.; EDGEWATER ASSOCIATES; DOES 1 through 10; CITIBANK, N.A., Third Party Defendants



The opinion of the court was delivered by: BARRY

 I. INTRODUCTION

 As may be expected when motions and cross-motions for summary judgment are supported by eight briefs, totalling some 350 pages, and over 300 separate exhibits, totalling thousands of pages, very little is agreed upon by the parties. They do agree that defendant Aluminum Company of America (hereinafter "Alcoa") constructed and operated an industrial manufacturing plant in Edgewater, New Jersey (hereinafter "Edgewater plant") from 1914 through 1965. They agree, as well, that between 1956 and 1965, Alcoa made use of at least two fire-resistant hydraulic fluids containing polychlorinated biphenyls, or PCBs. These hydraulic fluids, Pydraul F-9 (assertedly composed of over 50% PCBs) and Pydraul 600, were used in at least fourteen of the 120 hydraulic systems that operated in the Edgewater plant. At least two machines -- a Dempster baler and a vertical impact extrusion press -- utilized Pydraul F-9, and an indeterminate number of electrical transformers in the Edgewater plant were contaminated with PCBs. The parties also agree that in 1968 Alcoa sold the Edgewater plant, "as is," to Irving Maidman (who thereupon assigned his rights to Tri-Terminal Corporation), and that in 1983 (after two intervening owners), plaintiff Amland Properties Corporation (hereinafter "Amland") acquired title to the property pursuant to an "as is" purchase agreement with Citibank.

 The condition of the property at the time of the 1968 sale is in considerable dispute. Alcoa maintains that it removed most of the manufacturing equipment (except for 45 transformers) from the Edgewater plant, that the plant was free of debris and had been swept clean, and that the buildings were weather-tight. See Deft's Brief in Opposition to Plaintiff's Motion for Partial Summary Judgment (hereinafter "Deft's CERCLA Opposition Br.") at 7-8; Anderson Aff., paras 7-10 and Exhs. 1-13. Amland contends that, at the time of the 1968 sale, "many ovens, furnaces, tanks, machines, [and] pumps" remained, and that "areas of the Edgewater plant floors were stained with oil and fluids." *fn1" See Plff's Reply Brief in Support of Motion for Partial Summary Judgment (hereinafter "Plff's CERCLA Reply Br.") at 18-19; Plff's Supp. App., Tab 4. The parties also disagree as to the activities conducted at the plant by Tri-Terminal Corporation and its lessees, and particularly disagree as to whether those activities may have involved use of PCBs, compare Plff's CERCLA Reply Br. at 19 with Deft's CERCLA Opposition Br. at 8-10; discovery as to these issues has apparently has not been completed. Id. at 8. Furthermore, although it is clear that, even in 1968, Alcoa had knowledge that PCB use presented some amount of risk, see Deft's Reply Brief in Support of Summary Judgment Motion on Plaintiff's Common Law Claims (hereinafter "Deft's Common Law Reply Br.") at 43-44; Deft's Supp. App., Tabs 9-10, the extent of that knowledge remains undetermined, and further discovery in this area is necessary as well. See Plff's Brief in Support of Cross-Motion for Summary Judgment on Strict Liability Claim (hereinafter "Plff's Strict Liability Br.") at 62 and n. 68.

 Prior to its purchase of the Edgewater plant, Amland inspected the property. In 1981, a laboratory retained by Amland advised that testing for organics (such as PCBs) and inorganics be conducted, a suggestion Amland chose to decline. Although Alcoa contends that the suggested testing would have revealed any presence of PCBs, it does not appear to argue that Amland in fact was aware of the PCB contamination at the time of its 1983 purchase of the Edgewater plant. See Deft's CERCLA Opposition Br. at 15 and n. 15; 17 n. 18. The date of Amland's discovery of PCBs at the plant was April 1985, a result of testing performed by the engineering firm of Paulus, Sokolowski & Sartor. See Plff's CERCLA Reply Br. at 22; Plff's App., Tab 9.

 In June 1985, Amland notified Alcoa, the municipality of Edgewater, the New Jersey Department of Environmental Protection (hereinafter "DEP"), and the United States Environmental Protection Agency (hereinafter "EPA") of the presence of PCBs at the Edgewater plant. That same month, Amland contends, it was notified by DEP that it (and Alcoa) were parties responsible for that contamination, and that DEP would, if need be, commence an enforcement action mandating that Amland clean up the PCBs. See Plff's CERCLA Reply Br. at 23; Brecher Aff., para. 8. A draft administrative consent order ("ACO"), proposed in July 1985, called for a cleanup standard of no detectable PCBs at surface levels and up to 5 parts per million ("ppm") of PCBs below surface. See Plff's Supp. App., Tab 35 at 16. The final ACO, signed on August 21, 1986, contained a surface level standard of 1 ppm, and the same below-surface standard. Id., Tab 4, para. 13. *fn2" Whereas Amland portrays the DEP action as the imposition of a cleanup standard upon Amland, see Plff's CERCLA Reply Br. at 24-25, Alcoa maintains that DEP advised Amland that the condition of the Edgewater plant was not severe enough to warrant coverage by the Superfund, and that Amland (at DEP's suggestion) signed the ACO as "the fastest route for getting state approvals" for its planned transformation of the Edgewater site into residential condominiums. Deft's CERCLA Opposition Br. at 20-21, and 21 n. 23; Deft's App., Tab 75.

 The cleanup of the Edgewater plant included, according to Amland, initial consideration of various remedial measures, such as the use of solvents and microwaves, and encapsulation (covering) of affected surfaces. See Plff's CERCLA Reply Br. at 27; Brecher Aff., paras. 10, 16. The actual cleanup undertaken by Amland is said to have included "scarifying (removing the surfaces of) concrete flooring, removing concrete slabs, removing contaminated wood block flooring, and decontaminating non-porous surfaces (walls, pipes, roofs, trusses, etc.)." Plff's CERCLA Reply Br. at 27; see Plff's Supp. App., Tab 43. In addition, the cleanup procedure called for the decontamination of debris to a level of 50 ppm PCBs or lower, so that the decontaminated debris could be disposed of at a general municipal landfill, rather than at a hazardous waste landfill. See Brecher Aff., para. 17; Deft's Reply Brief in Support of Summary Judgment Motion on Plff's CERCLA Claims (hereinafter "Deft's CERCLA Reply Br.") at 29 n. 36. It appears, however, that PCB contamination has "migrated" deeper into certain concrete flooring than had been previously detected, see Plff's CERCLA Reply Br. at 28, requiring that Amland petition DEP for a revised cleanup procedure. See Brecher Aff., para. 11.

 Amland has conducted numerous tests for the presence of PCBs in the land and ambient air surrounding the Edgewater plant. Tests performed at a school located across from the plant's northern front proved negative, as have all other tests performed outside the plant's property. See Deft's App., Tabs 68-69; Deft's CERCLA Opp. Br. at 18 n. 19. The only -- or at least the primary -- exterior PCB contamination pointed to by Amland is the presence of PCBs in the asphalt of the Edgewater plant's parking area. See Plff's CERCLA Reply Br. at 47 n. 136; Plff's App., Tab 9 at 1. This contaminated area, directly adjacent to the Edgewater plant's loading docks, shows PCB levels of 2 to 47 ppm. Perhaps because this contamination is less than 50 ppm, which is the minimum level of PCB contamination that would constitute a spill under EPA's Spill Cleanup Policy, see 52 Fed. Reg. 10,688 (1987), Amland has not yet acted to remedy the contaminated area. See Deft's Supp. App., Tab 6.

 Amland commenced the instant lawsuit against Alcoa in April 1986 and seeks recovery of the costs it has incurred in evaluating and responding to the PCB contamination at the Edgewater plant. Jurisdiction in this Court is predicated upon the claim asserted under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., for the recovery of past and future response costs. In addition, the complaint asserts four common law tort claims: strict liability, private nuisance, public nuisance, and negligence.

 Amland moved, in early 1988, for partial summary judgment, requesting a declaration that Alcoa was and will be liable to Amland for the latter's response costs. *fn3" Alcoa thereupon cross-moved for summary judgment as to Amland's CERCLA and common law claims. In response, Amland cross-moved for summary judgment as to its strict liability claim.

 For the reasons that follow, I grant Alcoa's motions as to Amland's CERCLA claim, excluding monitoring and evaluation costs since April 1985, and as to Amland's private nuisance, public nuisance, and negligence claims. Both parties' summary judgment motions as to Amland's strict liability claim will be denied, in that at this juncture factual issues preclude a definitive application of the Restatement (Second) of Torts' factors regarding abnormally dangerous activities.

 II. DISCUSSION

 A. CERCLA

 CERCLA was enacted in 1980, in the waning months of the 96th Congress, and its "precipitous passage" perhaps explains the "inartful drafting and numerous ambiguities" that characterize its provisions. Artesian Water Co. v. Gov't of New Castle County, 851 F.2d 643, 648 (3d Cir. 1988). The act attempts to provide for responses, both short-term and long-term, to the presence of hazardous wastes that threaten to or have already contaminated the environment. In addition, responses both by federal and state governments and by private parties are included within CERCLA's ambit. As to both short-term and long-term responses, and both governmental and private cleanups, the overarching goal of CERCLA is to place the financial cost of the cleanup upon those parties responsible for creating the hazardous condition. See Lone Pine Steering Committee v. EPA, 777 F.2d 882, 886 (3d Cir. 1985); Artesian Water Co. v. Gov't of New Castle County, 659 F. Supp. 1269, 1276 (D. Del. 1987), aff'd 851 F.2d 643 (3d Cir. 1988).

 The section under which Amland seeks recovery states as follows, in relevant part:

 
Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section --
 
. . . .
 
(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,
 
. . . .
 
shall be liable for
 
. . . .
 
(B) any other necessary costs of response incurred by any other person [i.e., any person or entity other than the federal or state government] consistent with the national contingency plan[.]

 42 U.S.C. § 9607(a) (2) (B). In order to impose liability under this section, Amland must plead and prove the following five elements:

 
(2) There was a release or threatened release of a hazardous substance resulting from the disposal of that substance;
 
(3) The release or threatened release caused Amland to incur response costs;
 
(4) Amland's costs were necessary costs of response; and
 
(5) Amland's response was consistent with the national contingency plan ("NCP"). *fn5"

 See Artesian, 659 F. Supp. at 1278; Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152-53 (9th Cir. 1989). Absent the demonstrated presence of an affirmative defense -- that the release was due solely to an act of God or of war, or an act or omission of a third-party unrelated to the defendant, see 42 U.S.C. § 9607(b) (1)-(3) -- the above provisions of CERCLA, if proven, serve to impose strict liability upon the offending party. See New York v. Shore Realty Corp., 759 F.2d 1032, 1042 (2d Cir. 1985); United States v. Price, 577 F. Supp. 1103, 1113-14 (D.N.J. 1983).

 Alcoa raises a number of arguments in support of its contention that Amland may not recover under CERCLA. First, Alcoa makes a somewhat half-hearted argument that CERCLA should not be applied retroactively (i.e., to conduct occurring prior to the passage of CERCLA in 1980) in an action between private parties. It further contends that its actions did not constitute a disposal of hazardous waste, and that no release or threatened release is demonstrated. Finally, Alcoa maintains that Amland is barred from CERCLA recovery because the costs incurred by Amland were not consistent with the NCP. As will be discussed below, I reject the first three contentions, but am persuaded that the vast majority of Amland's response costs were not consistent with the NCP and, thus, are not recoverable under CERCLA.

 1. Retroactive Application of CERCLA

 Alcoa raises its retroactivity argument in two pages of its initial brief, see Deft's Brief in Support of Cross-Motion for Summary Judgment (hereinafter "Deft's Cross Motion Br.") at 18-20. Following Amland's rebuttal, see Plff's Strict Liability Br. at 32-37, Alcoa's retroactivity argument was relegated to a footnote. See Deft's CERCLA Reply Br. at 2 n. 4. Alcoa's succinct argument commences with the statement that the Court of Appeals for the Third Circuit has recognized that a "serious question exists" as to the application of CERCLA, in private party response actions, to conduct which took place before the 1980 enactment of that statute. See Deft's Cross Motion Br., at 18. The case cited, Smith Land & Improvement Corp. v. Celotex Corp., 851 F.2d 86 (3d Cir. 1988), in fact said no such thing, but only noted that the retroactivity issue had been neither briefed nor raised and, thus, should be decided in the first instance by the lower court. Id. at 92. Alcoa also asserts that the Smith Land court "notes authorities which reach both results" on this question, see Deft's Cross Motion Br. at 18; in fact, every authority cited in Smith Land holds that CERCLA may be applied retroactively, see United States v. Northeastern Pharmaceutical & Chemical Co. (hereinafter NEPACCO) 810 F.2d 726, 732-34 (8th Cir. 1987); Mayor of Boonton v. Drew Chemical Co., 621 F. Supp. 663, 668 (D.N.J. 1985); that the 1986 amendments to CERCLA may be applied retroactively, see United States v. Rohm & Haas Co., 669 F. Supp. 672, 676-77 (D.N.J. 1987); or that the Resource Conservation and Recovery Act, 42 U.S.C. § 6973, may be applied retroactively. See United States v. Price, 523 F. Supp. 1055, 1071-72 (D.N.J. 1981). Indeed, Alcoa cites no case, and this Court has found none, which holds that CERCLA should not apply retroactively. See O'Neil v. Picillo, 682 F. Supp. 706, 729 (D.R.I. 1988).

 Moreover, the reasoning of the courts holding proper the retroactive application of CERCLA is persuasive. As they note, the language of the statute providing for liability is couched in the past tense: "any person who at the time of disposal . . . owned or operated," 42 U.S.C. § 9607(a) (2); "any person who arranged with a transporter . . . for disposal," id. § 9607(a) (3); "any person who accepted any hazardous substances . . . for transport." Id. § 9607 (a) (4). In addition, because CERCLA authorized government and private parties to clean up abandoned waste sites and then seek recovery of the costs from responsible parties, the statute was intended to reach conduct (i.e., the abandonment of waste sites) that occurred prior to the date of CERCLA's passage. See United States v. NEPACCO, 810 F.2d at 733. Due process arguments against the retroactive application of CERCLA have been uniformly rejected on the ground that "the retroactive application of the legislation is itself justified by a rational legislative purpose," namely, the allocation of cleanup costs regarding abandoned waste sites to those parties responsible for creating those sites. Id. at 733-34, citing Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 730, 81 L. Ed. 2d 601, 104 S. Ct. 2709 (1984); see also O'Neil, 682 F. Supp. at 729; United States v. South Carolina Recycling & Disposal, Inc., 653 F. Supp. 984, 996-98 (D.S.C. 1986); United States v. Shell Oil Co., 605 F. Supp. 1064, 1072-73 (D. Colo. 1985). And, finally, Alcoa has given this Court no reason why CERCLA should apply to pre-1980 conduct in actions brought by the federal or state government but should not apply to that conduct in actions brought by private parties. Accordingly, I hold that CERCLA is properly invoked here. *fn6"

 2. Disposal

 The definition of "disposal," for the purposes of CERCLA, is set forth in the Solid Waste Disposal Act:

 
the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters.

 42 U.S.C. § 6903(3) (incorporated at 42 U.S.C. § 9601(29)). Alcoa contends that the conduct most vigorously complained of here -- the spilling of PCB-containing fluids onto the floor of an industrial plant -- is not disposal "into or on any land or water," in that the interior of a building falls within neither of those categories. See Deft's CERCLA Opposition Br. at 25; Deft's CERCLA Reply Br. at 27-28. Alcoa also argues that the presence of PCBs on the asphalt outside the Edgewater plant does not evidence a disposal in that the asphalt is neither land nor water within the meaning of CERCLA, Alcoa was not responsible for that contamination, and the reported level of contamination is too low to support a finding of disposal. Id. at 29. I need not and, thus, will not address this latter argument because I find that disposal within the plant is disposal "into or on any land or water" within the meaning of CERCLA.

 The few reported decisions concerning this issue have held that placement of hazardous wastes inside an enclosed manufacturing facility may constitute disposal of such waste into or on any land so as to satisfy the CERCLA definition. In BCW Associates Ltd. v. Occidental Chemical Corp., 1988 U.S. Dist. LEXIS 11275, Civ. No. 86-5947 (E.D. Pa. Sept. 29, 1988), the floors and fixtures of a warehousing facility came to be covered by a layer of dust as a result of the operations of Firestone Tire & Rubber Company, a previous tenant. Id. at 5. When the warehouse was reactivated, and used once more for the storage of goods, it was discovered that the dust was contaminated by lead. Id. at 8. Firestone, in an attempt to avoid CERCLA liability, argued that disposal within the warehouse fell outside § 9601(29) in that such disposal was not disposal into or on land. The court rejected this "unduly narrow" interpretation of the definition of "disposal," noting that "it is clear that Congress intended the term 'land' to encompass buildings and other types of real estate." Id. at 43; see 42 U.S.C. § 9607(a) (2) (holding liable owner or operator of a facility at which disposal occurs); § 9601(9) (defining facility as, inter alia, "any building structure, [or] installation"); State of New York v. General Electric Co., 592 F. Supp. 291, 296 (N.D.N.Y. 1984) ("Indeed, it appears that Congress sought to deal [in CERCLA] with every conceivable area where hazardous substances come to be located . . .").

 In so holding, the BCW Associates court relied upon Emhart Industries, Inc. v. Duracell Int'l, Inc., 665 F. Supp. 549 (M.D.Tenn. 1987), a case cited and discussed by both parties before me. Emhart concerned PCB contamination of a manufacturing plant in Waynesboro, Tennessee, in which drums containing PCBs were stored in the building, PCBs had contaminated the floor and roof of the plant, and underground tanks containing PCBs were leaking. Id. at 555. The court applied the CERCLA definition of "disposal" to that situation:

 
At Waynesboro, the spilling of PCBs during their use by Duracell in the manufacturing process, as well as the dumping of PCBs outside the plant, the flow of PCBs into the Green River, and the leaching of PCBs through the soil and into the groundwater during Duracell's ownership all constitute disposal under CERCLA.

 Id. at 574 (emphasis added).

 Alcoa reads this passage as holding that the spilling and storage of PCBs within a plant constitute disposal only if accompanied by dispersal of those PCBs into the land or water. See Deft's CERCLA Opposition Br. at 26. That reading distorts the language quoted above, which indicates, at least to me, that the spilling of PCBs within the plant and the dumping of PCBs outside the plant, independently of one another, amount to a CERCLA disposal. Moreover, a disposal can be such that hazardous waste "may" enter the environment; under Alcoa's reading, a disposal would require that the waste in fact reach the environment. In view of Alcoa's failure to cite any case holding that disposal within a plant is not disposal "on any land," *fn7" and in view of ...


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