Regional Airport Authority of Louisville v. Lfg

• Decision Date: 17 August 2006
• Docket Number: No. 05-5754.,05-5754.
• Citation: 460 F.3d 697
• Parties: REGIONAL AIRPORT AUTHORITY OF LOUISVILLE and Jefferson County, Plaintiff-Appellant, v. LFG, LLC; Navistar International Transportation Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

460 F.3d 697

REGIONAL AIRPORT AUTHORITY OF LOUISVILLE and Jefferson County, Plaintiff-Appellant, v. LFG, LLC; Navistar International Transportation Corporation, Defendants-Appellees.

No. 05-5754.

United States Court of Appeals, Sixth Circuit.

Argued: April 25, 2006.

Decided and Filed: August 17, 2006.

COPYRIGHT MATERIAL OMITTED

ARGUED: Robert W. Griffith, Stites & Harbison, Louisville, Kentucky, for Appellant. Cary R. Perlman, Latham & Watkins, Chicago, Illinois, for Appellees. ON BRIEF: Robert W. Griffith, W. Patrick Stallard, Stites & Harbison, Louisville, Kentucky, Judith A. Villines, Stites & Harbison, Frankfort, Kentucky, Charles S. Cassis, Dennis J. Conniff, Amy D. Cubbage, Frost Brown Todd, Louisville, Kentucky, for Appellant. Cary R. Perlman, Laurence H. Levine, Latham & Watkins, Chicago, Illinois, Hiram Ely III, Mark S. Riddle, Greenebaum, Doll & McDonald, Louisville, Kentucky, for Appellees.

Before: SUHRHEINRICH, GILMAN, and ROGERS, Circuit Judges.

OPINION

SUHRHEINRICH, Circuit Judge.

I. Introduction

The Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601-75, permits private party property owners to recover from prior private party property owners certain costs associated with the cleanup of contamination caused by the prior owners, where the cleanup costs were "necessary." "Necessary" costs means they were incurred in response to a threat to human health or the environment, see 42 U.S.C. § 9607(a)(4)(B), and "consistent" with the National Oil and Hazardous Substances Pollution Contingency Plan ("NCP"), see 42 U.S.C. § 9607(a). The NCP requires, among other things, completion of a remedial investigation ("RI"), feasibility study ("FS"), and a record of decision ("ROD"),¹ along with an opportunity for public comment. See 40 C.F.R. pt. 300. In Kentucky, for any risk management-based alternatives for dealing with contamination (i.e., remediation that stops short of removing the contamination), the Kentucky Division of Waste Management ("the State") requires a baseline risk assessment ("BRA"). For soil remediation, the State must approve a soils management plan. Plaintiff-Appellant Regional Airport Authority of Louisville and Jefferson County ("the Authority") brought a CERCLA action against Defendants-Appellees LFG, LCC ("LFG") and Navistar International Transportation Corporation ("Navistar") (collectively, "Defendants") for costs the Authority allegedly incurred in the remediation of property previously owned by Defendants. The district court granted Defendants summary judgment on the CERCLA claims, holding that the remediation was unnecessary and that the Authority failed to comply with the NCP. The Authority now appeals from that judgment.

The Authority also appeals from two other judgments. The first dismissed the Authority's common-law equitable indemnification claim on grounds that CERCLA provides an adequate legal remedy. The second overruled the Authority's objection to the magistrate's order compelling the production of certain allegedly privileged documents. Included in the latter challenge is the issue of whether attorney opinion work product communicated to testifying experts is protected from disclosure-an issue of first impression in this Circuit. For the reasons that follow, we AFFIRM all judgments.

II. Background

A. Facts

In June 1988, the Authority commenced the Louisville Airport Improvement Program ("airport expansion"), whereby it intended to expand Standiford Field (also known as Louisville International Airport). In order to accomplish its objectives, the Authority needed to condemn hundreds of parcels of private property. Among those was a 130-acre parcel owned by LFG ("the Site") that had been put to heavy industrial use for nearly fifty years.² The plan was to build new runways on the Site. Defendants admit that they used hazardous materials on the Site throughout their occupancy of the Site, and the Authority knew the Site was contaminated at the time of condemnation.

The airport expansion involved the use of federal funds, which required the Authority to complete an environmental impact statement ("EIS"). The final EIS was prepared in 1990, three years before the Authority acquired the Site from Defendants and six years before it took possession in 1996.³ The EIS indicated that at least some remediation would be necessary, and that the cost to remediate the Site would account for $9.5 million of the estimated $17.5 million total cost of remediation for the airport expansion.

Following subsequent environmental investigation, the Authority contacted the State regarding the contamination. In 1994, the Authority retained Camp, Dresser & McKee, Inc. ("Camp Dresser") to investigate further the extent of the contamination and the need, if any, for remediation. In November 1996, Camp Dresser reported to the Authority the results of its investigation in its Data Summary Report. The Authority then relayed this report to the State a month later.

In January 1997, the Authority began the final demolition phase of the existing structures on the Site. In February, the State sent a letter to the Authority explaining that Camp Dresser had conducted sampling at the Site. The letter further explained that the Authority should begin to focus its efforts on determining appropriate remedial alternatives. Despite this, the Authority did not evaluate the risk or any potential remedial measures, nor did it seek to complete a BRA. In fact, one month later in a weekly status report, the Authority instructed the following:

Major redirection has taken place on this job regarding the "model" that we are using for RI/FS. The NCP for the most part has been replaced with more of a no-nonsense approach to fulfilling Kentucky's requirements under their [sic] "mini-Superfund" program. Therefore, there are but three major deliverables on the horizon: 1) An RI/FS Work Plan (our "draft" to client on 3/13/97), 2) a "Soils Management Plan" (to be produced by others), and 3) an RI/FS Report, which will include preliminary design for groundwater remedy. A baseline risk assessment will not be completed.

In May 1997, shortly after the demolition was completed, the State conditionally approved the Authority's soil management plan.

Eventually, the Authority had Camp Dresser prepare an RI/FS to analyze the Authority's options for groundwater protection and to make specific recommendations. In September 1997, the Authority received the RI/FS. The Authority presented those reports to the State for approval in October. However, the Authority decided not to remove the contamination as recommended but instead pursued a risk management-based remedy. In the words of the runway project manager, the Authority "approved a substantial departure from the classic RI/FS model." The Site's west runway was completed and open for use in December 1997.

Following completion of the west runway, the Authority directed Camp Dresser to prepare a BRA. Camp Dresser delivered its findings in April 1998. The Authority submitted the BRA to the State later that month. In a letter dated almost a year after the runway was operational, the State notified the Authority that both the RI/FS and BRA had been approved. The letter also stated that the State "would support" any effort by the Authority to hold a formal public comment period, although the State noted that it might "not be worthwhile due to the fact that the work ha[d] already begun."

On February 24, 1999, the Authority published a notice in the Louisville Courier-Journal announcing a March 4 public meeting to discuss the remediation. A meeting was so held, but no one other than the Authority's lawyers attended.

The Authority never completed a ROD. In fact, the Authority decided sometime in late 2000 or 2001 that it would not file a ROD. Instead, in March 2002, the Authority filed with the State a Remedial Plan, which summarized the BRA, RI/FS, and soils management plan, and described the actions involved in preparing the Remedial Plan. The State approved the Remedial Plan in a letter dated May 24, 2002.

B. Procedural History

On May 15, 1998, after submitting the BRA to the State but before the State's response, the Authority filed the present action against Defendants to recover environmental response costs associated with the Site. The district court granted the Authority leave to file an amended complaint in May 2001. Claims One and Two of the amended complaint sought relief under CERCLA §§ 107(a), 113, respectively. Claim Three sought relief under the Kentucky Superfund Act. Claims Four, Five, and Six alleged various state law causes of action. Finally, Claim Seven sought equitable indemnification under Kentucky common law.

Defendants' answer denied all liability and alleged counterclaims almost identical to Claims One, Two, Three, and Seven of the complaint. Defendants simultaneously filed a motion to dismiss Claims Three and Seven of the complaint for failure to state a claim. On February 15, 2002, the district court granted the motion, concluding that the Kentucky Superfund Act does not provide for a private right of action and that equitable indemnification is not proper because CERCLA provides an adequate legal remedy. On June 19, 2003, the district court granted Defendants' motion for judgment on the pleadings as to Claims Four through Six. That left only the CERCLA claims remaining.

An extensive discovery period ensued. During this time, Defendants sought to compel the production of thousands of documents relating to communications between attorneys for the Authority and employees of outside companies like Camp Dresser that worked closely with the Authority on the airport expansion. The Authority responded that the documents were protected from discovery by the attorney-client privilege. On May 4, 2001, the magistrate judge ordered the Authority to produce all but 151 documents, with the remaining 151 to...