Bulk Distribution Centers, Inc. v. Monsanto Co.

• Citation: 589 F. Supp. 1437
• Decision Date: 19 June 1984
• Docket Number: No. 83-6805-CIV-JAG.,83-6805-CIV-JAG.
• Parties: BULK DISTRIBUTION CENTERS, INC., Plaintiff, v. MONSANTO COMPANY, United States Steel Corporation, Exxon Chemical Americas, State of Florida Department of Environmental Regulation; and Broward County Environmental Quality Control Board, Defendants.
• Court: United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida

589 F. Supp. 1437

BULK DISTRIBUTION CENTERS, INC., Plaintiff, v. MONSANTO COMPANY, United States Steel Corporation, Exxon Chemical Americas, State of Florida Department of Environmental Regulation; and Broward County Environmental Quality Control Board, Defendants.

No. 83-6805-CIV-JAG.

United States District Court, S.D. Florida, N.D.

June 19, 1984.

Richard Pettigrew, Morgan, Lewis & Bockius, Miami, Fla., for plaintiff.

Barry Malter, Mitchell H. Stabbe, Holland & Knight, Washington, D.C., for Monsanto.

Hendrick G. Milne, Squire, Sanders & Dempsey, Miami, Fla., for U.S. Steel.

Alvin B. Davis, Steel, Hector & Davis, Miami, Fla., Theodore L. Garrett, Washington, D.C., for Exxon.

Paul J. Ezatoff, State of Florida Dept. of Environmental Regulation, Tallahassee, Fla., for Dept. of Environmental Regulation.

James E. McDonald, McDermott, Will & Emery, Miami, Fla., for Broward Co. Env. Quality Ctl. Bd.

ORDER

GONZALEZ, District Judge.

I.

IN THIS ACTION the operator of a chemical transloading facility seeks a declaratory judgment as to the liability of three private chemical manufacturers for an alleged hazardous release at the operator's premises. The Declaratory Judgment Act, 28 U.S.C.A. §§ 2201; 2202 (1982), does not serve as an independent source of subject-matter jurisdiction, see Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 879, 94 L.Ed. 1194 (1950); Williams v. Wood, 612 F.2d 982, 984 n. 1 (5th Cir.1980), and thus federal jurisdiction is premised on section 9613(b) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or "Act"), 42 U.S.C.A. §§ 9601-9657 (1983), and section 505 of the Clean Water Act, 33 U.S.C.A. § 1365 (1978).¹ The doctrine of pendent jurisdiction makes possible this court's review of plaintiff's state claims. See United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). The controlling questions include whether the government must approve a private claimant's clean-up plan before it can commence a cost-recovery action under section 9607(a)(4)(B) of CERCLA; whether a private claimant can incur response costs consistent with the national contingency plan without first obtaining government approval of its plan; whether a "demand letter" lacking a specific reference to a "sum certain" is legally sufficient; and whether an administrative agency's threatened action to compel a person to clean up a hazardous release presents an actual controversy under the Declaratory Judgment Act? After reviewing the motions and memoranda submitted by all parties concerned, the court concludes that plaintiff's complaint should be dismissed without prejudice.

II.

Plaintiff Bulk Distribution Centers, Inc. ("Bulk") is a corporation whose principal business involves the transfer or transloading of materials, including chemical products, from railroad cars to trucks for subsequent shipment. Bulk operates a transloading facility at Port Everglades, in Ft. Lauderdale, Florida, providing services to corporate defendants Monsanto Company ("Monsanto"), United States Steel Corporation ("U.S. Steel"), and Exxon Chemical Americas ("Exxon").² Bulk maintains that its services included

the temporary storage of railroad tank cars of the shippers on spur railroad track owned by Seaboard Systems Railroad, Inc. and leased by Bulk; and the transloading of materials from railroad cars to tanker trucks using, in the case of EXXON, a pumping device designed under EXXON's specifications and meeting EXXON's prior approval.

Plaintiff's Memorandum in Response to Defendants' Motions to Dismiss or for Summary Judgment at 2 (filed Feb. 27, 1984) (citing Complaint ¶¶ 10, 11).

During transloading operations between January 1978 and May 1983, Bulk's Port Everglades terminal was the site of periodic releases of toxic chemicals known as phthalate esters.³ Although the cause of the spill is uncertain, soil analysis allegedly has traced the phthalate esters handled by Bulk to separate lots belonging to Monsanto, U.S. Steel, and Exxon.⁴

By letter dated March 14, 1983, Bulk received from defendant Broward County Environmental Quality Control Board ("BCEQCB" or "Board") a Warning Notice stating that the Board had "reason to believe" that the phthalate ester spill violated section 27-5.031(5) of the BCEQCB's Regulations because it constituted an unauthorized "discharge of hazardous/toxic substances into tidal, fresh, or ground waters ...." Plaintiff's Exhibit A-1. The BCEQCB instructed Bulk to submit to the Board a proposal to clean up the spill "that is signed and sealed by a professional engineer registered in the State of Florida." Id. Bulk was not to commence clean up until the BCEQCB "reviewed" and presumably approved the plan. The Warning Notice further stated that failure to respond to the Board's directive "may result in the issuance of a Notice of Violation and a Notice of Hearing to Assess a Civil Penalty" under county regulations. Id. (emphasis added).

The Board's letter prompted Bulk to retain the services of Enviropact, Inc., an environmental consulting firm, to conduct a remedial assessment of the spill site and to draft a clean-up proposal. Enviropact's report and recommendations, contained in a letter to Bulk dated April 12, Plaintiff's Exhibit A-4, were general in nature and did not meet with the Board's approval. Plaintiff's Exhibit A-6. The defendant Florida Department of Environmental Regulation ("DER"), which had been apprised of and involved in overseeing the clean up of the Port Everglades spill since April 1983, also disapproved of Bulk's remedial proposal. Plaintiff's Exhibit A-7.

In the ensuing weeks, the DER and the BCEQCB rejected a second clean-up plan, and Bulk's efforts to negotiate a solution with the corporate defendants also proved unsuccessful. Plaintiff's Exhibits A-12, -13(a)-(c). Monsanto, U.S. Steel, and Exxon all contested their liability, with Exxon specifically foreclosing any further discussion of cost reimbursement "until the Board and Bulk have agreed upon a cost-effective remedial plan for the site and all the costs associated with that plan have been fully defined." Plaintiff's Exhibit A-14, at 1. No apparent progress having been made, the DER notified Bulk by letter dated July 6 that it may be subject to an enforcement action unless it timely submitted a satisfactory engineering proposal to clean up the Port Everglades site. Plaintiff's Exhibit A-15. In response to that letter, Bulk informed the corporate defendants of its intention to litigate their liability under CERCLA in advance of the clean-up operation. Plaintiff's Exhibit A-16, at 2. By its own admission, Bulk's planned legal action was necessary because of the serious financial hardship posed by a unilateral clean-up effort, Plaintiff's Exhibits A-3, at 3; A-17, at 3,⁵ and was contingent upon the state and county filing a suit in state court to order the clean up of the phthalate ester spill. Plaintiff's Exhibit A-16, at 2.⁶

Although neither the DER nor the BCEQCB has instituted formal legal proceedings against Bulk for its failure to clean up the chemical spill, Bulk nevertheless initiated this action seeking a declaration of its right to contribution or indemnity against the corporate defendants under both CERCLA and state law for any costs Bulk may incur in cleaning up its Port Everglades facility. The corporate defendants have in turn filed motions to dismiss or in the alternative for summary judgment,⁷ principally arguing that plaintiff's complaint is either not ripe for review or fails to state a claim upon which relief can be granted.⁸

III.

With elections quickly approaching and the memory of the environmental disaster known as Love Canal⁹ still fresh in their minds, members of the Ninety-sixth Congress passed the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.A. §§ 9601-9657 (1983). CERCLA's legislative history is riddled with uncertainty because lawmakers hastily drafted the bill, and because last minute compromises forced changes that went largely unexplained.¹⁰ The lack of a clear legislative record has proven particularly burdensome in this case.

CERCLA was necessary because its precursor, the Resource Conservation Recovery Act of 1976 ("RCRA"), 42 U.S.C. §§ 6901-6987 (1976 & Supp. II 1978), as amended by Solid Waste Disposal Act Amendments of 1980, Pub.L. No. 96-482, 94 Stat. 2334, was not equipped to regulate the clean up of abandoned hazardous waste sites. See United States v. Northeastern Pharmaceutical and Chemical Co., 579 F.Supp. 823 at 839 (W.D.Mo.1984); Dore, The Standard of Liability for Hazardous Waste Disposal Activity: Some Quirks of Superfund, 57 Notre Dame Law, 260, 265-67 (1981). RCRA authorized the Environmental Protection Agency ("EPA") to require continuous monitoring of ongoing disposal sites, but applied to inactive sites only to the extent that they posed an "imminent hazard". H.R.Rep. No. 1016, 96th Cong., 2d Sess. 18, reprinted in 1980 U.S. Code Cong. & Ad.News 6119, 6120. CERCLA picked up where RCRA left off by establishing a means of controlling and financing both governmental and private responses to hazardous releases at abandoned and inactive waste disposal sites. See State ex rel. Brown v. Georgeoff, 562 F.Supp. 1300, 1312 (N.D.Ohio 1983); City of Philadelphia v. Stepan Chemical Co., 544 F.Supp. 1135, 1142-43 (E.D.Pa.1982); H.R.Rep. No. 1016, 96th Cong., 2d Sess. 25, reprinted in 1980 U.S.Code Cong. & Ad. News 6119, 6125, 6128.

The most significant feature of CERCLA is its $1.6 billion Hazardous Substance Response Fund ("Superfund" or "Fund"), which provides money for government or private clean up of a hazardous substance spill. Superfund is financed through an excise tax imposed upon generators of chemical and petroleum products and upon operators of hazardous waste sites, as well as from general appropriations. 42 U.S. C.A. § 9631 (1983).

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