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U.S. v. SPAULDING COMPOSITES COMPANY

May 10, 2002

THE UNITED STATES OF AMERICA, PLAINTIFF,
V.
SPAULDING COMPOSITES COMPANY, INC., DEFENDANT.



The opinion of the court was delivered by: Dennis M. Cavanaugh, United States District Judge.

OPINION

This matter comes before the Court on motion by Plaintiff The United States of America*fn1, against Defendant Spaulding Composites Company, Inc. ("Spaulding") seeking summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure as to the divisibility of costs and harm at the Caldwell Superfund Site in Fairfield, New Jersey. Oral argument was heard on this motion on May 3, 2002. After painstakingly reviewing the detailed submissions both in support of and in opposition to the present motion, this Court holds that the Government's motion for summary judgment shall be granted.

BACKGROUND

Spaulding's Lead Waste

Defendant Spaulding Composites, Inc. operated a manufacturing facility in Clifton, New Jersey that produced mica products and a slurry waste by-product containing lead. Between approximately 1958 and 1973, Caldwell Trucking Company transported lead-containing wastes generated by Spaulding and its predecessor-in-interest, Mycalex Corporation, and deposited them at the Caldwell Trucking Superfund Site (the "Caldwell Site"). Spaulding's waste was a "unique and well-defined by-product that contained inorganic materials, primarily insoluble lead." See Steven P. Goldberg Expert Report, dated 8/31/00. Counsel for Spaulding further described the waste product as a lead frit*fn2 encapsulated in glass. Oral Arg. Tr. at 14:23-25; 15:1-5. Notably, Spaulding's waste contained no volatile organic compounds ("VOC"). In fact, Spaulding asserts that it was incapable of producing VOCs and thus, it should not be responsible for costs related to remediating VOC contamination.

The Nature and Type of Costs Sought in the Present Motion

The OU1 remedy required some of the following actions:

Excavation and off-site disposal of California List Waste materials.
Excavation, off-site treatment, and disposal of soils with VOC concentrations.

In-situ stabilization of contaminated soils.

Placement of two feet of clean soil over the solidified mass.

While the Caldwell Trucking PRP Group performed the OU1 remedy pursuant to a consent decree, the EPA performed substantial OU1 work at the Caldwell Site, such as:

Performance of a remedial investigation and feasibility study to assess the contamination at the Caldwell Site.
Analysis of samples derived from the above-mentioned remedial investigation and feasibility through the Contract Laboratory Program.

Performance of remedial design for the OU1 remedy.

Review of EPA's OU1 remedial documents by the State of New Jersey.

Through this motion, the EPA seeks to recover its response costs in performing remedial efforts on OU1. See Declaration of Jo-Ann Velez ("Velez Decl.") ¶ 23. The EPA has carefully crafted it's motion to seek only those costs that they believe are incapable of division. In sum, the Government seeks $6,766,744.22. Supplemental Certification of Mark A. Gallagher in Support of Motion for Summary Judgment ("Gallagher Supp. Cert."), ¶¶ 9-10; Velez Decl., ¶¶ 9; Oral Arg. Tr. at 12:24-25, 13:1-7, 18:11-16.

The EPA also claims to have contracted with private entities to perform work addressing general and enforcement matters at the Site, rather than soil (OU1) or groundwater (OU2) contamination specifically. These independent contractors did the following work for the EPA:

Performance of searches for potentially responsible parties.

Assessment of the Site's overall health risks.

Compilation and maintenance of EPA's Administrative Records for the Site.
Compilation and maintenance of EPA's records regarding the Site in EPA's records center.
Performance of miscellaneous tasks such as publishing public notices, duplicating photographs, obtaining permits, etc. . .

The Government also seeks to recover $223,621.99 in general enforcement costs incurred by the EPA and $373,745.49 in costs incurred by the Department of Justice in enforcing aspects of this litigation and Defendant Spaulding's bankruptcy proceeding. See Oral Arg. Tr. at 8:20-25.

The January 22, 1997 Holding

In January of 1997, District Court Judge William G. Bassler found Spaulding liable under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a) for "at least some" of the costs incurred by the EPA for cleaning the Caldwell Site where Spaulding's waste was discovered. Judge Bassler allowed Spaulding the "opportunity to develop a factual record in support of its contention that the harm to the Site is divisible." U.S. v. Spaulding Composites Co., No. 94-5451 (D.N.J. Jan. 22, 1997) (order granting summary judgment in part). Id. According to the Government, only two issues remained after the January 1997 Opinion:
1. Whether Spaulding can demonstrate that any portion of the United States' costs are divisible and should be apportioned to another party?
2. What is the amount of the United States response costs?

A Summation of the Government's Costs

As mentioned during oral argument, the costs in this matter are a "moving target" and as a result, somewhat difficult to pinpoint. See Oral Arg. Tr. at 12:9-13. This flux is due to several factors. First, since the filing of this motion, additional remedial and response costs have been incurred. Supplemental Declaration of Richard J. Robinson, ¶¶ 2-4; [Supplemental] Declaration of Virginia A. Curry, ¶¶ 2-4; Gallagher Supp. Cert., ¶ 3. Second, pre-judgment interest has continued to accrue which is recoverable under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a). See Gallagher Supp. Cert., ¶ 5; Supplemental Declaration of Anne Macaluso, ¶¶ 2-8. Furthermore, the EPA has received reimbursements for some of its costs during the pendency of this motion. Gallagher Supp. Cert., ¶¶ 3, 7; Supplemental Declaration of Jo-Ann Velez ("Velez Supp. Dec."), ¶ 5-7. Particularly, on December 21, 2001, the EPA received a payment of $50,000 under the terms of a Consent Decree in a matter entitled U.S. v. Baureis Realty et al., 95-2732 (D.N.J.), a matter also before this Court. Velez Supp. Dec., ¶ 5. A subsequent payment in that same matter was made on February 11, 2002 in the amount of 1.6 million dollars. Id. Furthermore, the settling parties in U.S. v. Carborundum Corp. et al., No. 94-1484 (D.N.J.), have made five payments in the amount of $487,217.05. Velez Supp. Dec., ¶ 6. According to the EPA, 54.34 percent of the EPA's costs can be attributed to OU1 and general enforcement costs, so the EPA subtracted 54.34% of these reimbursements (totaling $2,137,217.05), or $1,161,363.74, from its total cost recovery request. See id. These collected reimbursements have also resulted in a reduction of the interest sought by the Government in the amount of $64,934.73. Therefore, the amount to be subtracted from the Government's total cost request is $1,226,298.48 ($1,161,363.74 $64,934.73).

As demonstrated above, the costs in this matter have frequently changed. However, as of May 3, 2002, the following total costs were sought by the Government:

OU1 Contract Costs sought = $1,451,563.69 as of the ...

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