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NEW JERSEY v. GLOUCESTER ENVTL. MGMT. SERVS.

April 23, 1993

STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION AND ENERGY, Plaintiff,
v.
GLOUCESTER ENVIRONMENTAL MANAGEMENT SERVICES, INC., et al.



The opinion of the court was delivered by: JEROME B. SIMANDLE

 SIMANDLE, District Judge:

 This matter arises out of the ongoing litigation surrounding the Gloucester Environmental Management Services, Inc. ("GEMS") Landfill. The GEMS Landfill is a Superfund *fn1" site ranked twelfth on the U.S. Environmental Protection Agency's National Priorities List. *fn2" The case arises from the efforts of plaintiff, the State of New Jersey, Department of Environmental Protection and Energy ("DEPE"), seeking to compel various parties -- including the alleged past and present owners of the landfill, various alleged transporters and generally industrial and commercial generators of the landfill's hazardous wastes -- to perform remedial activities to redress conditions at the landfill. After a series of amendments to pleadings previously permitted by the court, the DEPE has asserted direct claims against several hundred defendants, as discussed below. *fn3" One group of parties -- the Generators Group *fn4" -- has filed a Third-Party Complaint against 52 municipalities, seeking contribution from these local municipalities arising from their alleged generation and disposal of hazardous substances at the landfill.

 Many of the third-party defendant municipalities have moved *fn5" to dismiss the third-party complaint against them and have presented a pure issue of law for resolution. That issue is whether municipalities which disposed of municipal solid waste ("MSW") are liable as generators of a "hazardous substance" under the terms of the Comprehensive Environmental Response, compensation and Liability Act, 42 U.S.C. § 9601-9675 (1988) ("CERCLA"), or the New Jersey spill compensation and Control Act, N.J.S.A. 58:10-23.11, et seq. ("the Spill Act"). The municipalities also argue that the New Jersey Tort Claims Act provides them with protection from common law theories of contribution.

 For the purposes of this motion, the municipalities assume that municipal solid waste may contain incidental amounts of hazardous substances arising from household products. Municipalities Brief at 7. The municipalities' argument is best summed up with language from their own brief: "In enacting CERCLA, congress did not intend to create potential liability for municipalities that collect or transport household waste. This is evidenced by the fact that the Resource Conservation and Recovery Act (hereinafter "RCRA"), *fn6" the only federal environmental statute that specifically addresses the issue of household waste, specifically excludes it from the definition of 'hazardous substance.'" Third-Party Defendant Municipalities Brief in Support of Summary Judgment at 8 (hereinafter "Municipalities' Brief"). To support their claim that they are exempt from liability under CERCLA and the Spill Act, the municipalities argue that the United States Congress and the New Jersey State Legislature intended MSW to be exempted from treatment as a "hazardous substance" under those statutes.

 Opposition to this motion was submitted by third-party plaintiff Generators Group and the landfill's present owner, defendant Gloucester Township. Following an extensive review of the relevant statutes and their legislative history, and after considering the arguments of counsel, this court holds that municipalities were not intended to be per se exempt under either CERCLA or the Spill Act and that municipal solid waste is includable in the definitions of hazardous substances under CERCLA *fn7" and the Spill Act. The municipalities' motion for summary judgment in this case is therefore denied with respect to all issues.

 BACKGROUND

 The GEMS landfill was owned by the Township of Gloucester and was operated by Amadei Sand & Gravel, Inc., GEMS, Inc., and others between the late 1950s and 1980 when the State of New Jersey ordered its closure. N.J. Dept. of Env. Prot. v. Gloucester Env. Mgt., 719 F. Supp. 325, 328 (D.N.J. 1989). While operational, the GEMS landfill received municipal and industrial liquid and solid waste, including large amounts of toxic substances, from hundreds of sources. Id.

 The New Jersey Department of Environmental Protection ("NJDEP") first brought this lawsuit in the Superior Court of new Jersey in 1980, "seeking proper closure of the landfill, recovery of response costs, and penalties." Id. The case was removed to this court in 1984, and this court has retained subject matter jurisdiction. Id. at 333-342.

 In 1987, several of the alleged Generators filed this third-party complaint against the municipalities, seeking contribution for CERCLA cleanup costs. Third-Party Complaint (filed Nov. 6, 1987) at 8. The third-party plaintiffs subsequently filed two amended third-party complaints, one on April 14, 1988, and the other on October 24, 1990. In addition to statutory claims under CERCLA and the New Jersey Spill Act, the Second Amended Third-Party Complaint contained common law claims of negligence, public and private nuisance, claims under the New Jersey Tortfeasors Act and claims based on principles of equity.

 DISCUSSION

 I. CERCLA

 CERCLA was enacted by the United States Congress in 1980 and was designed as a remedial statute. Congress intended its legislation "to enhance the authority of the EPA to respond effectively and promptly to toxic pollutant spills that threaten[] the environment and human health." B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1197 (2d Cir. 1992). CERCLA was also intended to "assure that parties responsible for hazardous substances [bear] the cost of remedying the conditions they created." Mardan Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1455 (9th Cir. 1986) (citing statement of Rep. Florio, 126 Cong.Rec. 31964).

 Under § 107 of CERCLA, 42 U.S.C. § 9607, the EPA is authorized to recover its cleanup costs from responsible parties, 42 U.S.C. § 9607 (a)(4)(A), and private parties who are held responsible may, in turn, recover their response costs from other potentially responsible parties ("PRPs"), under § 113(f) of CERCLA, 42 U.S.C. § 9613(f).

 There are four classes of PRPs under CERCLA. The first consists of present owners and operators of facilities and the second includes some past owners and operators. CERCLA §§ 107(a)(1), (2); 42 U.S.C. § 9607(a)(1), (2). The third class consists of those persons who generated or arranged for the disposal or treatment of hazardous substances and forms the basis for the CERCLA action brought against the defendant third-party plaintiff Generators giving rise to the third-party complaint against the municipalities in this case. *fn8" CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3). The fourth class includes transporters of hazardous substances. CERCLA § 107(a)(4), 42 U.S.C. § 9607(a)(4).

 CERCLA imposes strict liability upon PRPs. See e.g. Murtha, 958 F.2d at 1198; General Electric Co. v. Litton Industrial Automation Systems, 920 F.2d 1415, 1418 (8th Cir. 1990), cert. denied, U.S. , 113 L. Ed. 2d 446, 111 S. Ct. 1390 (1991); Tanglewood East Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1572 (5th Cir. 1988); United States v. Kramer, 757 F. Supp. 397, 419 (D.N.J. 1991). Where environmental harm is indivisible, liability is joint and several for initial defendants. United States v. R.W. Meyer, Inc., 889 F.2d 1497, 1506-08 (6th Cir. 1989), cert. denied, 494 U.S. 1057, 108 L. Ed. 2d 767, 110 S. Ct. 1527 (1990); United States v. Chem-Dyne Corp., 572 F. Supp. 802 (S.D. Ohio 1983). CERCLA defendants bear the burden of demonstrating that the harm is divisible, and that their liability thus should not be joint and several. Kramer, 757 F. Supp. at 422 (citations omitted). Third-party defendants such as the Municipalities here are, by judicial precedent, only severally liable for contribution under § 113(f)(1) of CERCLA, 42 U.S.C. § 9612(f)(1). Kramer, 757 F. Supp. at 414. Since CERCLA is remedial, it "must be construed liberally to effectuate its two primary goals: (1) enabling the EPA to respond efficiently and expeditiously to toxic spills, and (2) holding those parties responsible for the releases liable for the costs of the cleanup." Murtha, 958 F.2d at 1198. The only defenses to CERCLA liability arise from acts of God, acts of war, or certain acts or omissions of third parties having no contractual relationship with the defendant. 42 U.S.C. § 9607(b).

 Under CERCLA a prima facie cause of action will be established where a plaintiff has shown: (1) that a defendant fits one of the four classes of PRPs identified in 42 U.S.C. § 9607(a); (2) that the site in question is a "facility" under 42 U.S.C. § 9601(9); (3) that there is a release or a threatened release of hazardous substances at that facility; (4) that the plaintiff has incurred costs relating to such release or threatened release; and (5) that the costs and response actions conform to the National Contingency Plan established under CERCLA and administered by the EPA. See Murtha, 958 F.2d at 1198. In this case, as in Murtha, the "municipalities' summary judgment motion turns on whether their arranging for the disposal of municipal solid waste satisfies the first and third elements." Id. Also as in Murtha, "since release or threatened release is not here at issue, discussion of the third element . . . turns to whether [MSW] falls within CERCLA's definition of hazardous substance." Id. at 1199.

 A. Municipalities as PRPs

 It is clear from the definition of "person" in 42 U.S.C. § 9601(21) that municipalities are explicitly included as PRPs for purposes of the liability provisions of 42 U.S.C. § 9607(a). *fn9" Additional evidence of this Congressional intent to consider municipalities as PRPs comes from CERCLA's limited exceptions to potential municipal liability which are found in 42 U.S.C. §§ 9601 (20)(D) and 9607(d)(2). *fn10" If Congress had the ability to make explicit exemptions from liability in these sections, it had the ability to make exemptions in 42 U.S.C. § 9607(a). The fact that municipalities are "persons" under CERCLA and that no such exceptions were made for municipalities under 42 U.S.C. § 9607(a) is compelling evidence that Congress intended municipalities to be held liable as PRPs under § 9607(a). *fn11"

 B. MSW as Hazardous Substance

 The second subject of concern is whether MSW falls within CERCLA's definition of a hazardous substance. "CERCLA defines as hazardous any substance so designated by the EPA pursuant to § 9602 or by any of four other environmental statutes." Murtha, 958 F.2d at 1199. The four statutes are the Solid Waste Disposal Act, the Clean Air Act, the Water Pollution Prevention and Control Act, and the Toxic Substances Control Act. Pursuant to § 9601(14)(B) and under § 9602, the EPA has promulgated a list of over seven hundred hazardous substances, found in Table 302.4 of 40 C.F.R. § 302 (1991). To be considered a hazardous substance under CERCLA, a substance need only be defined as hazardous under any one of the previously mentioned four environmental statutes or under Table 302.4. Murtha, 958 F.2d at 1200 (citing Eagle-Picher Industries, Inc. v. United States EPA, 245 U.S. App. D.C. 196, 759 F.2d 922, 927 (D.C.Cir 1985); United States v. Carolawn Co., 21 ERC (BNA) 2124, 2125 (D.S.C. 1984); United States v. Metate Asbestos Corp., 584 F. Supp. 1143, 1146 (D.Ariz. 1984)).

 Also, section 101(14) of CERCLA, 42 U.S.C. § 9610(14), specifically excludes only petroleum and natural gas from the definition of a hazardous substance. CERCLA makes no distinctions between or among PRPs, nor according to the source of the hazardous substances, in its definition of hazardous substance. "Whether a potentially responsible party is an owner or operator of a facility, or an arranger, generator or transporter of the hazardous substance, or a municipality, individual or chemical manufacturing company is not relevant in determining whether a substance is hazardous." Murtha, 958 F.2d at 1200. Additionally, "the concentration of hazardous substances in municipal solid waste--regardless of how low a percentage--is not relevant in deciding whether CERCLA liability is incurred." Id. The fact that MSW is not specifically mentioned as a hazardous substance does not exempt it from CERCLA's reach, either. As the Second Circuit Court of Appeals noted in Murtha, "For us to consider the whole separate from its hazardous constituent parts would be to engage in semantic sophistry. When a mixture or waste solution contains hazardous substances, that mixture is itself hazardous for purposes of determining CERCLA liability." Id. at 1201.

 C. The RCRA Exemption for Household Waste

 Despite the clear language of CERCLA and the demonstrable congressional intent to hold municipalities liable as PRPs under § 9607(a), the municipalities still maintain that they should be exempt. They rely upon the assertion that Congress intended the exemption for MSW found in regulations implementing RCRA to be incorporated by reference into CERCLA, through § 9601(14)(C). The second Circuit Court of Appeals addressed precisely this issue in Murtha and found the municipalities' argument to be meritless. 958 F.2d at 1201. We find Murtha's reasoning to be persuasive and in accord with our own reading of the statutory materials for reasons now discussed.

 In direct contrast to CERCLA's remedial purposes, RCRA was intended to provide a framework for regulation of hazardous wastes. While CERCLA is intended to facilitate the cleanup of past environmental pollution, RCRA is designed to prevent present and future environmental pollution by regulating "ongoing treatment, storage, and disposal of solid and hazardous wastes." Murtha, 958 F.2d at 1201. RCRA's household waste exclusion is a regulatory creation which was promulgated due to Congressional concerns that such waste be subjected to less stringent standards during day-to-day management of transportation, storage and disposal. Id. at 1201. "This narrow RCRA exemption in no way limits the definition of hazardous ...


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