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United States v. W.R. Grace & Co.

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY


November 10, 1998

UNITED STATES OF AMERICA,
PLAINTIFF,
V.
W.R. GRACE & CO., -CONN.,
DEFENDANT.

The opinion of the court was delivered by: Joel A. Pisano United States Magistrate Judge

OPINION

JOEL A. PISANO, UNITED STATES MAGISTRATE JUDGE

Before the Court is Wayne Township's motion to intervene in this CERCLA case between the United States and W.R. Grace. Defendants filed opposition, while the United States filed papers but took no position on the motion to intervene. The Court heard oral argument from Wayne Township, the United States, and W.R. Grace on October 26, 1998, and reserved judgment in order to issue this opinion. For the reasons set forth below, Wayne Township's motion to intervene is denied.

BACKGROUND

Between 1948 and 1961, Rare Earths, Inc., processed monazite sand at an industrial site in Wayne, New Jersey. Rare Earths used the yield of this process to produce eyeglass polishing compound. Radioactive thorium was a by-product of the processing of the monazite sand. In accordance with then-applicable government standards, Rare Earths disposed of the thorium on site in Wayne. The plant discontinued processing monazite sand in 1962, and all operations at the Wayne site ceased in 1971.

W.R. Grace & Co. is the successor to Rare Earths, Inc. In the 1970s and 1980s, W.R. Grace and the federal government undertook to decontaminate the site. Originally, government studies recommended an "on-site treatment remedy," but political pressure later forced the government to seek an off-site disposal remedy. At oral argument, counsel informed the Court that the current off-site remedy consists of excavating the site and shipping the soil using trucks and railcars from New Jersey to a Utah desert.

In November 1995, the government initiated negotiations with W.R. Grace, seeking monetary contribution to the clean-up effort. The United States and W.R. Grace negotiated for three years, and in April 1998, filed a consent decree with the federal district court pursuant to § 122 of CERCLA, 42 U.S.C. § 9622(d)(1)(A). In September 1998, the Township of Wayne moved to intervene because, in its view, the amount of money provided by W.R. Grace pursuant to the consent decree is inadequate.

DISCUSSION

The Township of Wayne relies upon three bases in asserting that it has a right to intervene: (1) § 113(i) of CERCLA; (2) Federal Rule of Civil Procedure 24(a)(2) (Intervention of Right); and (3) Federal Rule of Civil Procedure 24(b) (Permissive Intervention). Cases apply the same essential test when determining whether or not to grant intervention under both CERCLA § 113(i) and Rule 24(a)(2). See United States v. Alcan Aluminum, Inc., 25 F.3d 1174, 1181 (3d Cir. 1994). Therefore, the discussion that follows will examine whether to grant intervention (1) as of right under Rule 24(a)(2) or CERCLA § 113(i); or (2) permissively under Rule 24(b).

I. Intervention as of Right

Rule 24(a)(2) states: Upon timely application anyone shall be permitted to intervene in an action . . . when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. Fed. R. Civ. P. 24(a).

Similarly, CERCLA § 113(i) states:

In any action commenced under this chapter . . . any person may intervene as a matter of right when such person claims an interest relating to the subject of the action and is so situated that the disposition of the action may, as a practical matter, impair or impede the person's ability to protect that interest, unless the President or the State shows that the person's interest is adequately represented by existing parties. 42 U.S.C.A. § 9613(i) (1995).

In order to intervene as of right, a four-part test must be satisfied: (1) the application to intervene must be timely, (2) the proposed intervenor must have a sufficient interest in the litigation, (3) as a practical matter, that interest must be affected or impaired by the disposition of the litigation, and (4) the applicant's interest must not be adequately represented by existing parties in the litigation. See United States v. Alcan Aluminum, Inc., 25 F.3d 1174, 1181 (3d Cir. 1994). There is no doubt that Wayne's application is timely, as the consent decree was filed in April 1998 and the township sought to intervene in September 1998. The parties primarily disagree as to whether parts two and four of the above test are satisfied.

1. Does W.R. Grace Have a Sufficient Interest in the Litigation?

The Third Circuit has considered what a party must have at stake in order to satisfy the "sufficient interest" prong of the intervention analysis. See United States v. Alcan Aluminum, 25 F.3d 1174, 1183-86 (3d Cir. 1994). As the court explained in Alcan, a group known as the Air Products defendants who had already entered into their own consent decree with the government attempted to intervene in a later consent decree involving the United States and other potentially responsible parties (PRPs), known as the Alcan defendants. See id. at 1179. The proposed intervenors, the Air Products defendants, theorized that their rights to contribution would be extinguished if the government settled its claims with the Alcan defendants, thereby insulating the Alcan defendants from later contribution claims asserted by the Air Products defendants. See id.

In determining whether the Air Products defendants had a sufficient interest that would entitle them to intervene in the Alcan litigation, the court addressed the government's opposition argument that the Air Products defendants' interests were merely economic and insufficient to support a motion to intervene. See id. at 1185. After surveying New Orleans Public Service, Inc., v. United Gas Pipe Line Co., 732 F.2d 454, 464-66 (5th Cir. 1984), the Third Circuit held that "a party has more than an economic interest where it is the real party in interest and where the applicant [for intervention] would have standing to raise the claim." See Alcan Aluminum, 25 F.3d at 1185 (citing New Orleans Pub. Serv., 732 F.2d at 464). Finding that the Air Products defendants were the true parties in interest with respect to the their rights to sue for contribution, the court concluded that the right to seek contribution under CERCLA is a legally cognizable interest. See id. at 1185-86.

The Alcan court refused to determine whether or not the Air Products defendants had a right to intervene; rather, the Third Circuit remanded the case because it could not determine on the facts before it exactly why the district court denied intervention. See id. at 1187. There are a variety of cases with facts similar to Alcan, and courts have recognized that there are two schools of thought as to whether a non-settling PRP has a sufficient interest in litigation between the United States and a settling PRP. See United States v. Union Elec. Co., 64 F.3d 1152, 1162-64 (8th Cir. 1995) (comparing (a) various cases in which non-settling PRPs were denied intervention against (b) the holding in United States v. Acton, Corp., 131 F.R.D. 431, 433 (D.N.J. 1990) (concluding that non-settling PRP possessing future contribution claim had more than just a mere economic interest)). In short, there is no widespread agreement on the rights of non-settling PRPs to intervene in litigation between the United States and settling PRPs.

Unfortunately, no case squarely addresses whether a local municipality has a right to intervene in litigation between the United States and a PRP. The most helpful guidance appears in United States v. Vasi, 1991 WL 557609 (N.D. Ohio 1991). In Vasi, the court encountered the now familiar facts in which one PRP sought to intervene in litigation between the United States and another PRP. After concluding that in enacting CERCLA's intervention provision Congress sought to protect those who live in close proximity to hazardous waste sites by giving them a vehicle through which they could challenge the proposed remedial scheme, the Vasi court, in a footnote, cited to CERCLA's legislative history *fn1 that states:

Issues not directly related to the selection of remedy should not be entertained by the court because the purpose of review under new subsection 113 of CERCLA is only to resolve issues relating to the remedy. Id. at *3 n.2 (citing 131 Cong. Rec. H. 11069 (December 5, 1985)).

In the case before the Court, the result is dictated by how the issue is framed. If Wayne's basis for intervention was to assert a legal right of action and protect the health, welfare, and safety of its residents by objecting to the form or method of environmental clean up, then the township would probably have a right to intervene. That is not the issue, however. Wayne has no objection to the remediation method at the contaminated site. Counsel informed the Court at oral argument that the off-site remedy selected by the government is the same remedy that is preferred by Wayne Township. Therefore, this case is unlike many previous CERCLA cases in which a proposed intervenor seeks entry into a case in order to protect his future interest in contribution or some other recognized legal right.

Wayne has not asserted that it must intervene in order to protect its future statutory rights. Indeed, in its complaint submitted to the court pursuant to Rule 24(c), the Township of Wayne does not state its legal basis for intervention. Rather, paragraphs 10 and 11 of the proposed intervenor's complaint state only that Wayne "has an interest relating to the subject of the [W.R. Grace] litigation" because "[t]he Township is so situated that a disposition of the instant action pursuant to a Consent Decree or court-ordered judgment will impair or impede the Township's ability to protect its interest. . . ." See Wayne Township's Proposed Intervenor's Complaint ¶¶ 10, 11. Wayne's sole objection to the Consent Decree lodged with the district court is the amount of money that W.R. Grace will pay to the United States government. This is not a sufficient interest that would justify intervention in the litigation, because at oral argument counsel for the United States informed the Court that W.R. Grace's monetary contribution has no bearing on whether or not the remediation will go forward. The United States has decided that this property will be cleaned up, and this will occur regardless of the amount of W.R. Grace's monetary contribution to the project.

2. Are Wayne Township's Interests Adequately Represented by Existing Parties?

CERCLA cases have determined that the environmental interests of the federal government can differ from the often times more parochial interests of state or local governments. See United States v. Union Elec. Co., 64 F.3d 1152, 1169-70 (8th Cir. 1995) (citing Diamond v. District of Columbia, 792 F.2d 179, 192-93 (D.C. Cir. 1986)); United States v. BASF Inmont Corp., 819 F. Supp. 601, 606 (E.D. Mich. 1993) (observing that, at times, citizens desire a completely hazard-free environment whereas "E.P.A. finds a low level of risk to be acceptable."). In the context of environmental remediation, the federal government often must consider the environmental needs of the nation as a whole, as opposed to the more narrow local interests of a municipality and its residents. See Union Elec., 64 F.3d at 1170 (finding that the Environmental Protection Agency cannot be expected to litigate with the interests of non-settling PRPs uppermost in mind); Sierra Club v. Espy, 18 F.3d 1202, 1207-08 (5th Cir. 1994) (stressing that the United States represents the broad public interest, which is not the same as the interests asserted by local industry).

In the case before the Court, however, there is no disagreement between the federal and local sovereigns as to which method of remediation is best. The government has selected the method that was favored by Wayne Township, namely shipping the soil contents of the site out of New Jersey for off-site burial. Thus, there is no divergence of interests between the federal and local governments. The United States is adequately representing and implementing the wishes of Wayne Township and its residents.

In addition, the township has the opportunity to object to W.R. Grace's monetary liability during the public comment period following the filing of the consent decree. The Court recognizes that the public comment period has been held to be an inadequate means of assuring that a proposed intervenor's interests will be considered. See United States v. Union Elec. Co., 64 F.3d 1152, 1169 (8th Cir. 1995). In that case, however, the intervenor had a statutory right to contribution that might have been lost if the consent decree was approved by the court. Wayne is not, however, seeking to assert its legal rights through intervention. Rather, Wayne seeks to object to the amount of money that the government feels it can legally collect from W.R. Grace. These views can and should be made known to the district court during the statutory public comment period, but there is no need for Wayne Township to intervene in the lawsuit in order to voice its opinion.

II. PERMISSIVE INTERVENTION

Whether a court should grant intervention permissively under Rule 24(b) is largely discretionary. See In re Acushnet River & New Bedford Harbor, 712 F. Supp. 1019, 1023 (D. Mass. 1989); United States v. Vasi, 1991 WL 557609 at *6 (N.D. Ohio Mar. 6, 1991) (explaining that whether to grant permissive intervention is "wholly discretionary" and even if the requirements of Rule 24(b) are satisfied a court may still refuse to permit intervention). Like the district court in Vasi, this Court finds that intervention by Wayne Township into this litigation between the United States and W.R. Grace would be of no benefit to the parties. Intervention would only delay approval of the consent decree and, ultimately, delay clean up of the contaminated waste site.

CONCLUSION

For the reasons stated above, Wayne Township's motion to intervene is denied. An appropriate Order follows.

Orig: Clerk

cc: Hon. Alfred M. Wolin

All parties

File

ORDER

JOEL A. PISANO, UNITED STATES MAGISTRATE JUDGE:

Before the Court is Wayne Township's motion to intervene in this CERCLA case between the United States and W.R. Grace. Defendants filed opposition, while the United States filed papers but took no position on the motion to intervene. The Court heard oral argument from the Wayne Township, the United States, and W.R. Grace on October 26, 1998, and reserved judgment in order to issue this opinion. For the reasons set forth in the attached opinion, Wayne Township's motion to intervene is

DENIED.

JOEL A. PISANO UNITED STATES MAGISTRATE JUDGE

Orig: Clerk cc: Hon. Alfred M. Wolin

All parties

File


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