U.S. v. BP Amoco Oil

• Decision Date: 13 June 2001
• Docket Number: INTERVENOR-APPELLANT,PLAINTIFF-APPELLEE,DEFENDANTS-APPELLEES,No. 00-3906,00-3906
• Citation: 277 F.3d 1012
• Parties: (8th Cir. 2002) UNITED STATES OF AMERICA,, v. BP AMOCO OIL PLC; BP AMOCO PLC; CHEVRON CHEMICAL COMPANY; BAYER CORPORATION; MONSANTO COMPANY; SHELL OIL COMPANY, DICO, INC., Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1012

277 F.3d 1012 (8th Cir. 2002)

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. BP AMOCO OIL PLC; BP AMOCO PLC; CHEVRON CHEMICAL COMPANY; BAYER CORPORATION; MONSANTO COMPANY; SHELL OIL COMPANY, DEFENDANTS-APPELLEES.

DICO, INC., INTERVENOR-APPELLANT.

No. 00-3906

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: June 13, 2001

Filed January 24, 2002

Appeal from the United States District Court for the Southern District of Iowa

[Copyrighted Material Omitted] Before McMILLIAN and Richard S. Arnold, Circuit Judges, and Rosenbaum,¹ District Judge.

McMILLIAN, Circuit Judge.

The United States of America ("the government"), on behalf of the Administrator of the United States Environmental Protection Agency ("EPA"), brought the present action pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675, in the United States District Court² for the Southern District of Iowa, against BP Amoco Oil PLC, BP Amoco PLC, Chevron Chemical Company, Bayer Corporation, Monsanto Company, and Shell Oil Company, seeking reimbursement of costs incurred by the government in cleaning up a site located in Des Moines, Iowa, contaminated with trichloroethylene ("TCE") and other hazardous substances. Dico, Inc. ("Dico"), an intervenor in the action, now appeals from a final order of the district court granting the government's motion to enter a proposed consent decree ("the consent decree"), denying Dico's request for an evidentiary hearing on the government's motion to enter the consent decree, and denying Dico's motion to consolidate this action with Dico v. Amoco Oil Co., No. 4-97-10130 (S.D. Iowa 1997) ("the contribution action"). United States v. BP Amoco Oil PLC, No. 4-99-10671 (S.D. Iowa Sept. 29, 2000) ("slip op."). For reversal, Dico argues that the district court (1) abused its discretion and violated Dico's constitutional rights in failing to hold an evidentiary hearing and (2) abused its discretion in approving and entering the consent decree. For the reasons set forth below, we affirm.

Jurisdiction was proper in the district court based upon 28 U.S.C. § 1331. Jurisdiction is proper in this court based upon 28 U.S.C. § 1291. The notice of appeal was timely filed pursuant to Fed. R. App. P. 4(a).

Background

The following is a summary of the factual and procedural background, as set forth in the district court's order of September 29, 2000. See slip op. at 1014-16.

In 1974, TCE was detected in water coming from underground wells located near property owned by Dico and maintained by the Des Moines Water Works. The EPA designated the area the "Des Moines TCE Site" and placed it on the national priority list. The Des Moines TCE Site was divided into several "operable units." Operable Unit-2 ("OU-2") and Operable Unit-4 ("OU-4") (together "OU-2/4") are within Dico's property. Each was found to be contaminated with TCE, and OU-4 was also found to be contaminated with herbicides and pesticides.

Dico's corporate predecessor, Di-Chem, had operated a chemical formulation business on the Dico property until the 1970s. In 1994, pursuant to two Unilateral Administrative Orders issued by the EPA, Dico conducted two removal actions at OU-2/4. A group of former customers of Di-Chem (BP Amoco Oil PLC, BP Amoco PLC, Chevron Chemical Co., Bayer Corp., Monsanto Co., and Shell Oil Co.) conducted a third removal action pursuant to an Administrative Order on Consent. The EPA also incurred costs associated with the removal actions at OU-2/4.

In 1996, the EPA signed a Record of Decision ("ROD"), which confirmed the completion of the three removal actions at OU-2/4. The former Di-Chem customers requested settlement negotiations with the government regarding the costs associated with the OU-2/4 cleanup efforts. Pursuant to CERCLA, 42 U.S.C. § 9622(e)(3), the EPA undertook a non-binding preliminary allocation of responsibility ("NBAR") and allocated 61% of the responsibility to Dico and 39% to the former Di-Chem customers collectively. In April 1998, the EPA formally notified the former Di-Chem customers and Dico that they were potentially responsible parties ("PRPs") and provided them each with copies of the NBAR and a proposed consent decree. The PRPs were also notified that settlement with the government would provide protection from liability in the contribution action brought by Dico, arising out of the same remediation. Dico did not respond to the letter and did not participate in the settlement negotiations, despite repeated invitations by the government to do so. On November 2, 1998, when an agreement was imminent between the government and the former Di-Chem customers, the government sent Dico a reminder that a final consent decree would include contribution liability protection for the "settling defendants."

On November 29, 1999, the government filed the present action in the district court and simultaneously lodged the proposed consent decree, as signed by the government and the former Di-Chem customers (hereinafter referred to as "the settling defendants"). As required by CERCLA, 42 U.S.C. § 9622(d)(2), the consent decree was published in the Federal Register, in response to which Dico submitted objections and comments. Dico also moved in the district court to intervene in the present action and to consolidate it with the contribution action, which it had filed against the settling defendants in 1997. The district court granted Dico's motion to intervene, but deferred ruling on Dico's motion to consolidate the two actions.

On March 10, 2000, the government formally moved to enter the consent decree. Dico requested an evidentiary hearing on the government's motion to enter the consent decree, arguing that (1) a hearing was necessary because the government had failed to provide a fair and complete record and (2) it had a vested property interest in the contribution action, which, under the Fifth Amendment, could not be "taken" without due process (i.e., an evidentiary hearing) and just compensation.

Upon review of the parties' submissions, the district court entered the order from which Dico now appeals. The district court denied Dico's request for an evidentiary hearing, reasoning that a hearing was not necessary to supplement the record because Dico had been provided sufficient opportunities to supplement the record before and after the consent decree had been lodged in the district court. See slip op. at 1016-18. The district court also rejected Dico's assertion of a constitutional right to an evidentiary hearing, reasoning that Dico never had a right to contribution because its statutory contribution claim was at all times limited by 42 U.S.C. § 9613(f)(2) ("A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement."). See id. at 1017-19. Next, the district court granted the government's motion to enter the consent decree. Upon careful consideration of the parties' arguments and the record before it, the district court concluded that the consent decree had resulted from a fair process, that it was substantively fair, and that it was reasonable and consistent with CERCLA. See id. at 9-17. The district court then denied as moot Dico's motion to consolidate the contribution action with the action at bar. See id. at 17.

Judgment was entered accordingly, and Dico appealed. Both the government and the settling defendants oppose Dico's appeal.

Discussion

Denial of Dico's motion for an evidentiary hearing

Dico first argues that the district court improperly denied its motion for an evidentiary hearing. Dico contends that the administrative record was incomplete, biased, and inaccurate, and that an evidentiary hearing was the only meaningful way for Dico to rebut the government's evidence. Dico asserts, among other things, that the district court erroneously relied on the settlement process as a basis for concluding that Dico had been given an opportunity to supplement the record. On the contrary, Dico argues, the settlement process offered nothing more than an opportunity for Dico to bargain away its contribution rights. Dico also points out that it was notified of the potential settlement between the government and the settling defendants only after Dico had already invested approximately $5.7 million in response costs and $300,000 in litigation costs. Therefore, Dico argues, its refusal to participate in the settlement negotiations was justified. Dico further maintains that a hearing was necessary to examine the evidentiary basis for a nine-page sworn statement by Daniel Shiel, an EPA attorney, whose statement was submitted by the government in support of its motion for entry of the consent decree. Shiel's statement (hereinafter "the Shiel declaration") purported to explain, among other things, the government's methodology in assigning 61% and 39% of the responsibility to Dico and the settling defendants, respectively, using eight specific factors.³ According to Dico, the Shiel declaration was the government's primary evidence in support of the EPA's 61/39 liability allocation, the Shiel declaration did not include or identify supporting documentation, and Dico was entitled to examine Shiel under oath regarding the bases for his assertions. Likewise, Dico contends, the government's allegations of costs were not adequately supported by the evidence in the record and therefore should have been subjected to examination, which only an evidentiary hearing could have adequately provided.

Alternatively, Dico argues that its constitutional rights were violated as a result of the district court's denial of its motion for an evidentiary hearing. Dico maintains that it paid well more than its fair share of the remediation costs and also notes that it filed its contribution claim before the...