786 F.Supp. 471 (E.D.Pa. 1992), 90-1761, FMC Corp. v. United States Dept. of Commerce

Docket Nº:90-1761.
Citation:786 F.Supp. 471
Case Date:February 19, 1992
Court:United States District Courts, 3th Circuit, Eastern District of Pennsylvania

Page 471

786 F.Supp. 471 (E.D.Pa. 1992)




No. 90-1761.

United States District Court, E.D. Pennsylvania.

Feb. 19, 1992

Page 472

Neil G. Epstein, Carol L. Press, Hangley, Connolly, Epstein, Chicco, Foxman & Ewing, Philadelphia, Pa., for plaintiff and counter defendant.

Virginia Gibson-Mason, Philadelphia, Pa., Ronald Spritzer, U.S. Dept. of Justice, Environmental Defense Section, Environmental & Natural Resources Div., Washington, D.C., Glen Freyer, U.S. Dept. of Justice, Environmental & Natural Resources, Environmental Defense Section, Washington, D.C., for defendants and counter claimants.


NEWCOMER, District Judge.

This action is brought pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. §§ 9601-9675, and the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202. Plaintiff FMC Corporation ("FMC") owned and operated, from 1963 to 1976, the Avtex site in Front Royal, Virginia, ("the Facility"), a site which has been listed on the National Priorities List since 1986. FMC seeks indemnification from the defendants for some portion of its present and future response costs of response in performing removal actions and other response actions at the Facility. FMC bases its claim on United States Government ("Government") activities during the period of January, 1942 through 1945 relating to the operation of a rayon manufacturing facility at the Avtex site, and contends that these activities render the Government liable as an "owner," "operator," and, or "arranger" under section 107 of CERCLA, 42 U.S.C. § 9607.

During World War II, after the bombing of Pearl Harbor and the Japanese conquest of Asia, the United States suffered a loss of 90% of its crude rubber supply. An urgent need arose for natural rubber substitute to be used in manufacturing airplane tires, jeep tires and other war related items. The best rubber substitute available was high tenacity rayon tire cord. The Facility was one of the major producers of high tenacity rayon yarn, which was twisted and woven into high tenacity rayon tire cord. FMC presented evidence at trial showing that during the World War II period, the Government participated in managing and controlling the Facility, which was then owned by American Viscose Corporation ("American Viscose"), requiring the Facility to manufacture increasing quantities of high tenacity rayon yarn, which involved the treatment of hazardous materials and necessitated the disposal of hazardous materials. FMC also presented evidence showing that the Government owned "facilities" and equipment at the plant used in the treatment and disposal of hazardous materials.


A. Parties and Present Status of the Facility

1. FMC is a corporation duly organized and existing under the laws of the State of Delaware with its principal place of business at 200 East Randolph Drive, Chicago, Illinois 60601, and with an office at 2000 Market Street, Philadelphia, Pennsylvania 19103.

2. Defendants United States Department of Commerce, Secretary of Commerce Robert Mosbacher are departments, agencies and instrumentalities of the United States Government.

3. The Facility is a rayon manufacturing facility located at 1169 Kendrick Lane, Front Royal, Virginia.

Page 473

4. The Facility consists of a manufacturing plant, as well as 23 waste disposal basins and landfill areas, located on approximately 440 acres of land. (Docs. 128, p. 2; 129, p. 4).

5. Pursuant to Section 105 of CERCLA, 42 U.S.C. § 9605, the Facility was added to the National Priorities List ("NPL") in 1986. The NPL is a prioritized list of sites around the United States considered by the Environmental Protection Agency ("EPA") to require remedial action.

6. FMC purchased the Facility in 1963 from American Viscose.

7. In 1976, FMC sold the Facility to Avtex Fibers-Front Royal, Inc. (Avtex Fibers, Inc. and Avtex Fibers-Front Royal, Inc. are collectively referred to as "Avtex").

8. On or about November 10, 1989, Avtex terminated all manufacturing operations at the Facility.

9. On February 6, 1990, Avtex Fibers, Inc. and Avtex Fibers-Front Royal, Inc. filed Petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Pennsylvania (Docket Nos. 90-20289 and 90-20290, respectively).

B. Disposal and Releases of Hazardous Substances and Response Actions at the Facility

10. In 1982, carbon disulfide, a chemical used in manufacturing high tenacity rayon was identified in ground water in the vicinity of the Facility.

11. In August 1986, Avtex signed an Administrative Order by Consent ("the Consent Order") with the EPA whereby Avtex agreed to conduct a Remedial Investigation/Feasibility Study ("RI/FS") at the Facility. In January 1988, the Consent Order was amended to include FMC. (Doc. 130).

12. The RI/FS conducted pursuant to the Consent Order revealed the presence of carbon disulfide, lead and zinc in viscose waste materials which had been disposed of at the Facility. (Doc. 129, p. 7).

13. The RI/FS conducted pursuant to the Consent Order showed the presence of carbon disulfide and arsenic in off-site ground water in the vicinity of the Facility. (Doc. 129, p. 7).

14. On September 30, 1988, after completion of the RI/FS, the EPA issued a Record of Decision ("ROD") which presented the EPA's selected initial remedial action, called Operable Unit One. Operable Unit One was directed toward the remediation of ground water contamination and certain on-site waste basins. (Doc. 131).

15. By letter dated January 13, 1989, the EPA notified the Department of Commerce that based upon certain information regarding the activities of the War Productions Board ("WPB") at the Facility during World War II, the EPA considered the Department of Commerce a potentially responsible party under CERCLA. (Doc. 108, pp. 1-4).

16. In the January 13, 1989 letter, the EPA invited the Department of Commerce to participate in formal negotiations, the goal of which was to develop a consent decree in which the Department of Commerce (and other potentially responsible parties) would commit to conduct a Remedial Design/Remedial Action at the Facility to implement the Operable Unit One ROD. (Doc. 108, pp. 1-4).

17. By letter dated May 11, 1989, which responded to the EPA's January 13, 1989 letter, the Department of Commerce took the position that it was not liable as a past operator of the Facility and declined to participate in formal negotiations with the EPA. (Doc. 108, p. 5).

18. On June 30, 1989, the EPA issued an Administrative Order ("the June 30 Order") directing Avtex and FMC to undertake remedial activities to implement the Operable Unite One ROD. (Doc. 129).

19. By letter dated December 8, 1989, the EPA requested FMC to conduct a new RI/FS in order to establish a final remedy for the Facility. (Doc. 127).

20. The scope of the new RI/FS has been expanded to include the entire facility and is far more extensive than the scope of

Page 474

the RI/FS previously conducted by Avtex and FMC. (Doc. 127).

21. February 2, 1990, the EPA issued a second Administrative Order ("the February 2 Order") directed solely to FMC. The February 2 Order stated that sampling by the EPA had revealed the presence of carbon disulfide, cadmium, chromium, lead, phenol, zinc and mercury in certain on-site waste basins at the Facility and directed FMC to take certain response actions with respect to these basins. (Doc. 128).

22. The response actions directed by the February 2 Order are in addition to those required under the June 30 Order.

23. The EPA has informed FMC that it expects FMC to undertake further remedial activities to address contamination at the Facility.

24. There has been a release or threatened release of hazardous substances from the Facility.

25. There has been a release or threatened release of hazardous substances from the installations, equipment, pipes and/or pipelines owned by the Government at the Facility.

26. From 1985 through the present, FMC has incurred significant costs of response actions, taken under CERCLA, at the Facility.

27. The response actions that FMC has been required to undertake and is presently undertaking at the Facility include the remedial investigation, feasibility study and clean-up of the same type of hazardous substances that were generated and disposed of at the Facility and at the installations, equipment, pipes and/or pipelines owned by the Government at the Facility during the periods 1942 to 1948.

C. Pre-World War II History of the Facility

28. During the period from 1937 through 1939, American Viscose purchased several tracks of land in Front Royal, Virginia. American Viscose then constructed a plant on the site and began manufacturing textile rayon at the Facility in or around 1940.

29. Before World War II, no machines at the Facility were set up to produce high tenacity rayon. The Facility had to later convert existing equipment in order to start high tenacity rayon production. The machines were adapted by changing the gears and the speed of the spinning wheels. (Testimony of Dr. Stuhr, technical manager of American Viscose--who was employed at the Facility from 1940-1948).

30. As of 1940, American Viscose was a subsidiary of Courtaulds, Ltd. ("Courtaulds") a British corporation. (Doc. 9049).

31. The British Government, in 1941, sold or caused to be sold securities of American Viscose previously owned by Courtaulds to a group of United States banks. (Doc. 9049).

32. American Viscose...

To continue reading