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EPEC Polymers, Inc. v. NL Industries, Inc.

United States District Court, Third Circuit

May 24, 2013



MICHAEL A. SHIPP, District Judge.

This matter comes before the Court on Defendant NL Industries Inc.'s ("Defendant" or "NL") Motion to Dismiss pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). (Def.'s Br., ECF No. 10-1.) Plaintiff EPEC Polymers, Inc. ("Plaintiff" or "EPEC"), filed Opposition. (Pl.'s Opp'n, ECF No. 12.) Defendant filed a Reply. (ECF No. 15.) The Court has carefully considered the Parties' submissions and decided the matter without oral argument pursuant to Rule 78. For the reasons set forth below, and other good cause shown, Defendants' Motion to Dismiss is GRANTED in part and DENIED in part.

I. Background

A. Factual History

The following facts are drawn from the Complaint and are taken as true for purposes of this Opinion. EPEC is a Delaware corporation with its principal place of business located in Texas. (Compl. ¶ 1, ECF No. 1.) EPEC owns a parcel of land in an industrial area of Woodbridge Township, New Jersey, situated along the northern shore of the Raritan River (the "EPEC Site"). ( Id. ¶ 5.) The EPEC Site was used for the production of chemical products by EPEC and its predecessors in interest, Heyden Chemical Corporation ("Heyden"), Heyden-Newport Corporation and Tenneco Chemical Company. The EPEC Site covers a total of approximately 185 acres that are in varied states of use. ( Id. ¶ 7.) The southern two-thirds of the EPEC Site are wetlands and are divided by berms created by the United States Army Corps of Engineers ("Army Corps") into the Central and Southern Wetlands. ( Id. ¶¶ 8-10.) This lawsuit concerns the Central Wetlands, which cover approximately 45 acres. ( Id. ¶ 11.)

NL is a New Jersey corporation with its principal place of business located Dallas, Texas. ( Id. ¶ 2.) Directly across the Raritan River from the EPEC Site, but within the Borough of Sayreville, lies property formerly owned by NL and its predecessors that was also used for production of chemical products (the "NL Site"). ( Id. ¶¶ 12-17.) Chemical production operations were active at the NL Site from 1935 until 1982. ( Id. ¶ 13.) Plaintiff alleges that the production of these chemicals, and their ensuing disposal, render the NL Site a "facility" for purposes of liability. ( Id. ¶ 108.) When referring to the NL Site for purposes of liability, and as explained more fully below, the Court, as does Plaintiff, will use the term "NL Facility."

Plaintiff's Complaint alleges that hazardous waste and by-product materials generated at the NL Site/Facility in the form of thorium, uranium and radium (the "Radiological Materials") were dumped by NL and its predecessors into the Raritan River between the years of 1935 and 1947. ( Id. ¶¶ 14-38.) "As a result of these discharges, " Plaintiff alleges that "the Radiological Materials came to be located in the Raritan River sediments." ( Id. ¶ 39.)

Prior to the discharge of the Radiological Materials, the Raritan River underwent a series of dredging projects to widen and deepen a channel for shipping. ( Id. ¶¶ 40-45.) That process continued when discharge of the Radiological Materials was occurring. In or around 1940, and pursuant to the 1937 River and Harbor Act and the National Defense River and Harbor Act, Pub. L. No. 76-868, the Raritan River was targeted by the Army Corps for further dredging. ( Id. ¶¶ 52-53.) The Army Corps contacted landowners and businesses along the banks of the Raritan River to "secure locations for the deposition of dredge spoils that would be generated" by further dredging. ( Id. ¶ 54.) EPEC's predecessor, Heyden, entered into an agreement with the Army Corps for the placement of dredge spoils on the Central Wetlands. ( Id. ¶¶ 55-56.) Dredging commenced in December 1940, but no dredge spoils were deposited on the Central Wetlands until 1943. ( Id. ¶¶ 57-62.) From approximately 1943 to 1947, "dredge spoils removed from the Raritan River... were placed on the Central Wetlands portion of the EPEC [Site]." ( Id. ¶ 63.)

Skipping forward nearly sixty-five years to "April 2009, EPEC performed a gamma surface survey at the EPEC [Site]" that "detected the presence of elevated levels of thorium in the soils." ( Id. ¶ 65-66.) According to EPEC, "[t]horium was never produced, generated and/or used at the EPEC [Site]." ( Id. ¶ 67.) Furthermore, "[s]ubsequent investigations at the... Central Wetlands have revealed elevated levels of thorium and the other Radiological Materials in the Central Wetlands (the "Radiological Contamination")." ( Id. ¶ 70.) Plaintiff contends that the source of the Radiological Contamination is the Radiological Materials discharged by Defendant into the Raritan River and removed to the Central Wetlands by the Army Corps' dredging process. ( Id. ¶¶ 71-77.)

Plaintiff has spent "over $2 million investigating the Radiological Contamination in the Central Wetlands" and believes it will continue to "incur significant costs related to the investigation and/or remediation of the" contamination. ( Id. ¶¶ 84-85.) Remediation is anticipated to include, but not be limited to, "the excavation, transportation, and disposal of soils and other material containing [the] Radiological Contamination." ( Id. ¶ 85.) The damages from the contamination also extend to the natural resources and wetlands located within the Central Wetlands. ( Id. ¶ 86.)

B. Plaintiff's Complaint

Plaintiff's Complaint seeks to hold Defendant liable via several theories: 1) common law trespass; 2) common law private nuisance; 3) several causes of action pursuant to the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et. seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub. L. 99-499, 100 Stat. 1613 (1986), including a cost recovery action pursuant to § 9607(a), contribution pursuant to § 9613(f), and declaratory judgment pursuant to § 9613(g)(2); 4) declaratory judgments pursuant to 28 U.S.C. § 2201 and N.J. Stat. Ann. § 2A:16-50, et. seq. ; 5) the New Jersey Spill Compensation Act pursuant to N.J. Stat. Ann. § 58:10-23.11 et. seq. ; 6) negligence; 7) strict liability; and 8) common law indemnification.

II. Legal Standard

A. Standard for Motion to Dismiss

Rule 8(a)(2) "requires only a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to give the defendant fair notice of what the... claim is and the grounds on which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). On a motion to dismiss for failure to state a claim, a "defendant bears the burden of showing that no claim has been presented." Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005).

A district court conducts a three-part analysis when considering a Rule 12(b)(6) motion. Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). "First, the court must take note of the elements a plaintiff must plead to state a claim.'" Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009)). Second, the court must accept as true all of a plaintiff's well-pleaded factual allegations and construe the complaint in the light most favorable to the plaintiff. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). The court, however, must disregard any conclusory allegations proffered in the complaint. Id. For example, the court is free to ignore legal conclusions or factually unsupported accusations which merely state that "the-defendant-unlawfully-harmed-me." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555). Finally, once the well-pleaded facts have been identified and the conclusory allegations ignored, a court must next determine whether the "facts alleged in the complaint are sufficient to show that plaintiff has a plausible claim for relief.'" Fowler, 578 F.3d at 211 (quoting Iqbal, 556 U.S. at 679).

Determining plausibility is a "context-specific task which requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. Plausibility, however, "is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. at 678 (quoting Twombly, 550 U.S. at 545). In the end, facts which only suggest the "mere possibility of misconduct" fail to show that the plaintiff is entitled to relief. Fowler, 578 F.3d at 211 (quoting Iqbal, 556 U.S. at 679).

III. Analysis

Defendant moves pursuant to Rule 12(b)(6) to dismiss all of Plaintiff's CERCLA claims, as well as Plaintiff's common law trespass claim, common law private nuisance claim and common law contribution claim.

A. Plaintiff's CERCLA Claims

1) CERCLA Generally

CERCLA and SARA "were enacted to provide for liability and remediation of hazardous substances in the environment and for cleanup of inactive hazardous waste sites." New Jersey Tpk. Auth. v. PPG Indus., Inc., 197 F.3d 96, 103 (3d Cir. 1999) (" PPG "). "CERCLA and SARA together create two legal actions by which parties that have incurred costs associated with cleanups can recover some or all of those costs: (1) Section [9607] cost recovery actions; and (2) Section [9613] contribution actions." Morton Int'l, Inc. v. A.E. Staley Mfg. Co., 343 F.3d 669, 675 (3d Cir. 2003). CERCLA is a strict liability statute which imposes liability jointly and severally upon potentially responsible parties ("PRPs") "for costs associated with cleanup and remediation." PPG, 197 F.3d at 104. Section 9607 only provides three enumerated defenses, none of which are relevant to this case. See 42 U.S.C. § 9607(b). Here, Plaintiff has sought relief under both Sections 9607 and 9613, each of which will be addressed in turn.

2) Plaintiff's Cost Recovery Claim - 42 U.S.C. § 9607(a)

The Third Count of Plaintiff's Complaint seeks recovery of "all costs incurred by EPEC in connection with the investigation and/or remediation of hazardous substances and/or material discharged and/or released from the NL Facility that came to be located on the EPEC [Site]." (Compl. ¶ 117.) This count relies on two distinct theories of CERCLA liability: 1) "owner/operator" liability; and 2) "arranger" liability. ( See id. ¶¶ 108-14.) For the reasons stated more fully below, both EPEC's owner/operator and arranger liability claims state a prima facie cause of action under § 9607(a) and survive NL's Motion to Dismiss.

a) Plaintiff's Owner/Operator Theory

CERCLA liability under § 9607 requires a plaintiff to prove: "1) that the defendant is a PRP; 2) that hazardous substances were disposed of at a facility'; 3) that there has been a release' or threatened' release of hazardous substances from the facility into the environment; and 4) that the release or threatened release has required or will require the plaintiff to incur response costs.'" PPG, 197 F.3d at 103-04. The PRPs relevant to the current case are "1) the current owner or operator of a facility; 2) any person who owned or operated the facility at the time of the disposal of a hazardous substance; ...

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