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U.S. v. COMPACTION SYSTEMS CORP.

December 2, 1999

UNITED STATES OF AMERICA
V.
COMPACTION SYSTEMS CORPORATION, ET AL.



The opinion of the court was delivered by: Hedges, United States Magistrate Judge.

INTRODUCTION

By Letter-Opinion and Order dated July 15, 1999, I granted partial summary judgment in favor of third-party plaintiffs, Browning Ferris Industries of North Jersey, Inc., Connecticut Resources Recovery Authority, Knoll Pharmaceutical Company, Occidental Petroleum Corporation, and Rayonier Inc. and third-party defendants BASF Corporation, CWM Chemical Services, LLC f/k/a CWM Chemical Services, Inc., as successor to R & R Sanitation, Waste Management of North Jersey, Inc., Cadillac Plastic Groups, Inc., Dart Industries, Inc., Garbco Associates, Inc. f/k/a J. Filiberto Sanitation Inc., The Mennen Company, and Paul Ritter Roofing Co., Inc. (the "Settlors"), and against third-party-defendant Keuffel & Esser ("K & E"). On August 30, 1999, I granted K & E's motion for reconsideration. Settlors now move for reconsideration of the August 30th order. I have considered the papers submitted in support of and in opposition to the motion. There was no oral argument. Rule 78.

BACKGROUND

The underlying action was for cost recovery and declaratory relief against numerous potentially responsible parties ("PRPs") under Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. § 9607. The United States sought to recover costs that it incurred in connection with the release and threatened release of hazardous substances into the environment at and from the Combe Fill North Landfill Superfund Site (the "Site"), located in Mount Olive Township, Morris County, New Jersey. The Site occupies approximately 100 acres, about 65 acres of which were used as a landfill between 1966 and 1981.

In the early 1980's, the United States Environmental Protection Agency ("EPA") commenced an investigation at the Site searching for environmental contamination. As a result of the finding that hazardous substances had been disposed of, in September of 1983, the Site was placed on the National Priorities List ("NPL"), 40 C.F.R. Part 300, Appendix B, pursuant to Section 105(a) of CERCLA, 42 U.S.C. § 9605(a). NPL sites are those which the EPA has determined present the greatest danger to public health, welfare, or the environment, and are eligible for long-term remedial action financed with funds from the Hazardous Substance Superfund, commonly referred to as the "Superfund." 42 U.S.C. § 9611.

Based on the results of the RI/FS, the EPA determined that there was a "release" or "threatened release" of hazardous substances at or from the Site within the meaning of Section 101(22) of CERCLA, 42 U.S.C. § 9601(22). On September 29, 1986, the Regional Administrator of EPA Region II signed a Record of Decision ("ROD"). The ROD outlined the remedial action to be conducted at the Site, which included the installation of a cap over the landfill, construction of a drainage system to control run-off, installation of a vent system to control underground methane gas, fencing of the Site, and monitoring of the remedy. The remedial activities are now complete and monitoring is ongoing. These actions taken by the EPA and NJDEP in connection with the Site constituted "response" actions within the meaning of Section 101(25) of CERCLA, 42 U.S.C. § 9601(25). As a result of these actions, the United States incurred approximately $17 million in unreimbursed costs.

The United States and numerous PRP's entered into an agreement which tolled the statute of limitations between August 15, 1995 and August 1, 1996. Keuffel & Esser ("K & E") was not a signatory to that agreement. On November 18, 1996, the United States filed this action under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), for the recovery of costs against numerous PRPs. K & E was not named as a defendant. The named defendants filed third-party contribution actions against a number of parties, including K & E, on March 13, 1997. After discovery and intensive negotiations, all parties except K & E reached a settlement with the United States. The settlement was embodied in a Consent Decree dated June 14, 1999, in which the United States reserved its right to bring future actions to recover, among other things, natural resource damages and response costs incurred after the date of lodging of the Decree. The Settlors did not admit liability under CERCLA in the Consent Decree.

On July 15, 1999, the Court issued an order granting the Settlors partial summary judgment against K & E. The Settlors had argued that they were entitled to partial summary judgment declaring that K & E was liable to them under Section 113(f) of CERCLA because no genuine issue of material fact existed with respect to any of the elements incident to the establishment of liability under Section 107 of CERCLA. The Settlors argued that there was no genuine issue that K & E arranged with Morris County Sanitation, a transporter, to dispose of K & E's waste which included, at a minimum, zinc, thiourea, ethyl acetate, toluene, and xylene, which are listed as hazardous substances in Table 302.4, 40 C.F.R. § 302.4 (1998). The Settlors argued that evidence, including K & E's own admissions, established that K & E's waste was transported to and disposed of at the Site during the relevant period of time and that the waste contained hazardous substances.

K & E argued that no evidence existed to establish that Morris County Sanitation actually disposed of K & E's solid wastes at the Site as required by Section 107(a)(3). In the absence of any evidence proving this element of its alleged CERCLA liability, K & E argued that it was entitled to judgment as a matter of law. The Court held, however, that K & E failed to present any facts that contradicted the admissions K & E made in a sworn statement to the NJDEP that K & E disposed of wastes at the Site. K & E also failed to present any facts that contradicted the admission of Shanley that K & E's waste was disposed of at the Site.

K & E also argued that the Settlors failed to prove that they were entitled to contribution as a matter of law because they had no evidence that they paid more than their fair share of the response costs. However, the Court concluded that Settlors did not need to make a showing of this to prevail on summary judgment. K & E further argued that it was not liable to the United States because it had a statute of limitations defense and could not be liable to the Settlors. The Court rejected that argument and granted partial summary judgment, holding that the evidence was sufficient to grant the Settlor's motion and the amount of liability would be determined at trial.

K & E moved for reconsideration. K & E argued that the Settlors were not entitled to a judgment for contribution because they asserted no common liability and provided no evidence that they paid more than their fair share of their liability. K & E argued that the Settlors were required to prove their own liability to the United States in order for them to recover the amount of their liability that exceeded their fair share under the contribution provision of Section 113(f) of CERCLA.

K & E also argued that the same legal principles have been adopted under CERCLA contribution as that of the common law theory of contribution requiring joint liability. K & E argued that Section 886(A) of the Restatement (Second) of Torts has been adopted by the courts as the basis for contribution under Section 113(f). Section 886(A) provides:

  1) Except as stated in Subsections (2), (3) and (4),
  when two or more persons become liable in tort to the
  same person for the same harm, there is a right of
  contribution among them, even though judgment has not
  been recovered against any or all of them.
  2) The right of contribution exists only in favor of
  a tortfeasor who has discharged the entire claim for
  the harm by paying more than his equitable share of
  the common liability, and is limited to the amount
  paid by him in excess of his share. [Restatement
  (Second) of Torts, § 886A(2)].

Alternatively, the Settlors argued that Section 113(f) authorizes a party to file a contribution action even if there is no admission of liability. Section 113(f) of CERCLA, 42 U.S.C. § 9613(f), provides that "[a]ny person may seek contribution from any other person who is liable or potentially liable under [CERCLA Section 107(a), 42 U.S.C. § 9607(a).]" The Settlors argued that the courts that have considered the issue of requiring an admission or finding of liability before permitting contribution actions have consistently rejected that concept.

The Court, however, held that it was necessary for the liability of Settlors to be established before they may seek contribution. Not only does the defendant in a contribution action have to be liable, but so does the contribution plaintiff. Otherwise, the action would be for cost recovery under Section 107. The Court further held that although the payment of monies pursuant to a settlement agreement might be sufficient to establish liability, the settlement agreement stated that, "[t]he Settling Defendants do not admit any liability to the United States arising out of the transactions or occurrences alleged in the Complaint." Consent Decree at 2. Therefore, the Court held that liability was not established.

The Settlors further argued that because they paid over $6 million dollars to the United States in settlement and because K & E, the only party adjudicated liable at the Site, paid nothing, K & E was therefore liable to the Settlors for the costs attributable to K & E's share of liability at the Site. However, the Settlors did not state what constituted their share of the liability. The Court held that such a showing is necessary in order to determine whether the Settlors have paid more than their equitable share of the common liability. See Restatement (Second) of Torts, Section 886A(2). Therefore, even if there is an assumption that K & E and the Settlors shared joint liability to the United States under CERCLA, summary judgment could not be granted on the Settlors' claim for contribution because they did not prove that they paid more than their fair share of the total liability as required by Section 886A.

For the reasons set forth above, K & E's motion for reconsideration was granted on August 30, 1999. The Letter-Opinion and Order of July 15, 1999, was vacated. The Settlors now move for reconsideration of the August 30th Order.

DISCUSSION

Motion for Reconsideration

The Federal Rules of Civil Procedure do not expressly recognize motions for "reconsideration." United States v. Emmons, 107 F.3d 762, 764 (10th Cir. 1997); Ford v. Elsbury, 32 F.3d 931, 937 n. 7 (5th Cir. 1994). Instead, such motions are treated as motions to alter or amend judgment under Rule 59(e) or motions for relief or orders under Rule 60(b). Emmons, 107 F.3d at 764. This is not the case in the District of New Jersey, where the Local Civil Rules provide for motions for reconsideration under Local Civil Rule 7.1(g). Courts in this district have routinely held that although Local Civil Rule 7.1(g) is entitled "Motions for Reargument," "`[r]econsideration' and `reargument' are interchangeable terms," and, however denominated, will be governed by the rule. Public Interest Research Group v. Yates Indus., 790 F. Supp. 511, 512 n. 1 (D.N.J. 1991).

Local Civil Rule 7.1(g) provides that a party may, within ten days of the entry of an order adverse to that party, move for reargument upon a showing that dispositive factual matters or controlling decisions of law were overlooked by the court in reaching its prior decision. See Damiano v. Sony Music Entertainment, Inc., 975 F. Supp. 623, 633-34 (D.N.J. 1996). The operative word in the rule is `overlooked.' Mere disagreement with a court's decision normally should be raised through the appellate process and is inappropriate on a motion for reargument. See Bermingham v. Sony Corp. of Am., Inc., 820 F. Supp. 834, 859 n. 8 (D.N.J. 1992), aff'd, 37 F.3d 1485 (3d Cir. 1994). Only where the court has overlooked matters that, if considered by the court, might reasonably have resulted in a different conclusion, will it entertain such a motion. See, e.g., Pittston Co. v. Sedgwick James of New York, Inc., 971 F. Supp. 915, 918-19 (D.N.J. 1997). Based on the foregoing, the Court grants reconsideration to further clarify and modify the August 30th Order.

The History of Contribution Under CERCLA

By 1980, Congress was convinced that the improper disposal of waste and hazardous substance contamination at numerous dump sites throughout the United States were a threat to public health and the environment and that prompt clean up was necessary. Transtech Indus. v. A & Z Septic Clean, 798 F. Supp. 1079, 1084 (D.N.J. 1992), appeal dismissed, 5 F.3d 51 (3d Cir. 1993), cert. denied. Mayco Oil & Chemical Co. v. Transtech Indus., Inc., 512 U.S. 1213, 114 S.Ct. 2692, 129 L.Ed.2d 823 (1994). In response, Congress enacted CERCLA to require polluters to pay for remediation costs associated with their pollution. 42 U.S.C. § 9601, et seq. See Pub.L. No. 96-510, Stat. 2767 (1980); United States v. Alcan Aluminum Corp., 964 F.2d 252, 257-58 (3d Cir. 1992), on remand, 892 F. Supp. 648 (M.D.Pa. 1995), aff'd, 96 F.3d 1434 (3d Cir. 1996), cert. denied, 521 U.S. 1103, 117 S.Ct. 2479, 138 L.Ed.2d 988 (1997). Under CERCLA, owners and operators of hazardous waste facilities, disposers of hazardous substances at the facility, arrangers of such disposal at a facility or persons who accepted hazardous substances for transport to disposal treatment facilities could be held liable for all removal and remedial costs incurred by the federal or state government and for any necessary costs of response "consistent with the national contingency plan" as incurred by any other person. 42 U.S.C. § 9607; see Transtech Indus., 798 F. Supp. at 1084 (holding that CERCLA granted statutory authority to "hold operators of and contributors to hazardous waste sites strictly liable for the clean up costs of remedying" site contamination).

The original 1980 CERCLA legislation did not contain a contribution provision, however, and its legislative history was unclear as to whether a potentially responsible person ("PRP") could recover from other PRPs cleanup costs paid that exceeded its fair share. See New Castle v. Halliburton NUS Corp., 111 F.3d 1116, 1122 (3d Cir.), reh'g denied, 116 F.3d 82 (3d Cir. 1997); United States v. New Castle County, 642 F. Supp. 1258, 1263 (D.Del. 1986) (hereinafter "New Castle II"). Courts attempting to parse the CERCLA legislation concluded that the right to contribution was neither expressly nor by implication found within the legislation, but that federal courts possessed the power to create federal common law. See New Castle II, 642 F. Supp. at 1262; SC Holdings v. A.A.A. Realty Co., 935 F. Supp. 1354, 1361 (D.N.J. 1996).

These courts concluded that contribution actions were necessary as an incentive to encourage PRPs to settle with the United States, so the courts exercised their equitable powers to "recogniz[e] an implicit cause of action for contribution where persons have been subject to joint and several liability and have incurred costs in excess of their fair share." New Castle, 111 F.3d at 1122; see New Castle II, 642 F. Supp. at 1267; Alcan, 964 F.2d at 258 (holding that courts should liberally construe CERCLA to effectuate its goals). Some courts found that Section 107(e)(2) permitted the courts "to fill in gaps within CERCLA's liability provisions . . . and [that Section] 107(e)(2) support[ed] a finding that Congress left to the courts the decision of whether a right to contribution should exist under CERCLA. . . ."*fn2 New Castle II, 642 F. Supp. at 1265 n. 7. Other courts found a right of contribution within CERCLA § 107(a)(4)(B). See Key Tronic Corp. v. United States, 511 U.S. 809, 816, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994); In the Matter of Reading Co., 115 F.3d 1111, 1118 (3d Cir. 1997); New Castle II, 642 F. Supp. at 1262.

Realizing the confusion, Congress enacted the Superfund Amendment and Reauthorization Act ("SARA"), Pub.L. 99-499; 100 Stat. 1613 (codified in scattered sections of 42 U.S.C.), which amended CERCLA, 42 U.S.C. § 6911, 6911(a) and 9601-75,*fn3 SC Holdings, 935 F. Supp. at 1361; see New Castle II, 642 F. Supp. at 1267. SARA's Section 113 replaced the common law right found by the courts with an express statutory cause of action.*fn4 SC Holdings, 935 F. Supp. at 1361; see New Castle County v. Halliburton NUS Corp., 903 F. Supp. 771, 778 (D.Del. 1995), aff'd in part, 111 F.3d 1116 (3d Cir.), reh'g denied, 116 F.3d 82 (3d Cir. 1997) (hereinafter "Halliburton"); Reading, 115 F.3d at 1119.

SARA was enacted to ensure the prompt and thorough cleanup of contaminated sites largely through the enactment of Section 113(f).*fn5 United States v. Alcan Aluminum, Inc., 25 F.3d 1174, 1180 (3d Cir. 1994) (hereinafter "Alcan II"). Congress realized that it could not provide the EPA with sufficient funding to remediate toxic sites, so it instead attempted to "maximize the participation of responsible parties in the cleanup." Alcan II, 25 F.3d at 1180. To accomplish this, Congress provided incentives to parties to encourage settlement with the United States and to ensure that liable parties could pursue restitution from other potentially responsible parties. Such incentives included the right to contribution from other PRPs.*fn6 Transtech Indus., 798 F. Supp. at 1079.

The Issues before the Court

The Settlors move for reconsideration and argue that the Court overlooked controlling law in holding that the Settlors must establish their own liability prior to seeking contribution and that liability under CERCLA cannot be determined without also determining damages. The Settlors contend that if the Court does not grant reargument, it should certify the issues decided by its August 30 Order to the Third Circuit Court of Appeals.

Alternatively, K & E argues that the Settlors must establish their common liability before they seek contribution, that the Settlors are volunteers and do not have "liable" status, that Settlors must prove their fair share before they seek contribution, that Section 886 of the Restatement (Second) of Torts applies to CERCLA contribution claims, and that certification should not be granted for appeal to the Third Circuit.

Liability under CERCLA

K & E contends that CERCLA requires that third-party plaintiffs must have common liability with a third-party defendant before the third-party defendant can be liable under CERCLA. The Court agrees with K & E in that a certain form of common liability must exist in a contribution claim under CERCLA, but does not agree that such liability is lacking here.

1) Liability Under CERCLA Section 113

Although CERCLA's contribution provision does not expressly include a requirement of joint and several liability.*fn7 CERCLA § 113(f) sets forth that "[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) [CERCLA § 107(a)] of this title." 42 U.S.C. § 9613(f); see Reading, 115 F.3d at 1124. Therefore, "CERCLA contribution, like common law contribution, requires some form of joint liability." 115 F.3d at 1115; see New Castle, 111 F.3d at 1121. Although a PRP suing for contribution must show that a third-party defendant is liable under Section 107(a), which alone, under a cost recovery action, would typically impose joint and several liability, courts have consistently held that the liability imposed on a third-party defendant under contribution Section 113(f)(1) is several. 111 F.3d at 1121; see Reading, 115 F.3d at 1124 (holding that contribution traditionally requires common liability for the same injury and the same holds true for Section 113(f)); United States v. Helen Kramer, 953 F. Supp. 592, 601 (D.N.J. 1997) (holding that third-party defendants are only severally liable while direct defendants' liability to satisfy judgments is joint); General Elec. v. Buzby Bros. Materials Corp., 1996 WL 608488, at *4 (D.N.J. June 20, 1996) (holding that Section 113 creates several liability).

Generally, Section 113(f) parallels the scope of common law contribution which "applies to all `joint tortfeasors,' in the sense of two or more persons who are liable to the same person for the same harm. It is not necessary that they act in concert or in pursuance of a common design, nor is it necessary that they be joined as defendants."*fn8 Reading, 115 F.3d at 1124 (quoting Restatement (Second) of Torts ยง 886A, cmt. b (1977)). Therefore, a third-party defendant's ultimate liability to the third-party ...


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