US v. Colorado & Eastern RR, 89-C-1786.

• Decision Date: 27 May 1993
• Docket Number: No. 89-C-1786.,89-C-1786.
• Citation: 832 F. Supp. 304
• Court: U.S. District Court — District of Colorado
• Parties: UNITED STATES of America, Plaintiff, v. COLORADO & EASTERN RAILROAD, Defendant.

832 F. Supp. 304

UNITED STATES of America, Plaintiff, v. COLORADO & EASTERN RAILROAD, Defendant.

No. 89-C-1786.

United States District Court, D. Colorado.

May 27, 1993.

Stephen Taylor, Asst. U.S. Atty., for plaintiff.

Timothy Gablehouse, Wayne Schroeder, Denver, CO, for defendant.

AMENDED ORDER

CARRIGAN, District Judge.

In October 1989, the United States filed suit under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. against a number of defendants, including Farmland Industries, Inc. (Farmland) and Colorado & Eastern Railroad Company (CERC) to recover the costs it incurred cleaning up the Woodbury Chemical Company Superfund Site (the site). Farmland filed claims under state and federal law against co-defendant CERC and third party defendants Great Northern Transportation Company (GNTC) and Gary W. Flanders (collectively the CERC parties).¹

Farmland's claims against the CERC parties are as follows: Cost recovery under CERCLA (first claim); contribution under CERCLA (second claim); liability for CERC debts under CERCLA (third claim); common law liability for CERC debts (fourth claim); negligence (fifth claim); interference with cleanup activities (sixth claim), and vicarious liability (seventh claim).

The CERC parties moved for summary judgment on Farmland's claims pursuant to Fed.R.Civ.P. 56. Farmland responded by opposing that motion. The CERC parties also moved to dismiss Farmland's state law claims pursuant to Fed.R.Civ.P. 12(b). Farmland responded by opposing that motion. Farmland, in turn, moved for partial summary judgment on the issue of amount and reasonableness of additional cleanup costs it incurred as a result of the alleged conduct of the CERC parties. The CERC parties responded by opposing that motion.

Jurisdiction over Farmland's federal claims is proper pursuant to 28 U.S.C. § 1331 and 42 U.S.C. § 9613(b). Jurisdiction over Farmland's state law claims is asserted under the doctrine of pendent jurisdiction. The parties have fully briefed the issues and oral argument would not materially facilitate the decision process.

I. FACTUAL BACKGROUND.

CERC owns land in and around the cleanup site. Farmland is the corporate successor to a chemical manufacturing plant previously operated at the site. Following initiation of the United States' suit, Farmland and another defendant, McKesson Corporation, entered a partial consent decree with the United States, agreeing to pay $700,000 for response costs incurred by the government prior to the decree. Farmland and McKesson also agreed to finance and carry out the remediation work plan and reimburse the government for any future response costs that it might incur.

On April 20, 1992, CERC entered a consent decree with the United States, agreeing to pay $100,000 for past response costs not recovered by the government in earlier settlements.

Farmland's claims against the CERC parties assert that CERC's excavation and soil removal activities, refusal to allow access and other actions increased the clean up costs by $1,439,330. (Manesh aff., p. 2-3). Farmland paid fifty-one percent of the asserted additional cost, or $734,058.30 (id., p. 3), the amount of damages it seeks here.

II. THE CERC PARTIES' MOTION FOR SUMMARY JUDGMENT.

Summary judgment is proper if the pleadings, depositions and affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The party opposing a properly supported summary judgment motion may not rest upon the mere allegations of the complaint, but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986). A factual dispute is material only if, under the governing law, its resolution might affect the action's outcome. A factual dispute is genuine only if a reasonable fact finder could return a verdict for the nonmoving party. Id.

The CERC parties move for summary judgment on all issues of liability arguing that Farmland's claims are barred by the contribution protection provided by 42 U.S.C. § 9613(f)(2), which provides:

"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."

As an initial matter CERC has not yet paid the $100,000 required by the decree. CERC maintains that this failure is of no consequence here. I disagree.

Paragraph VIII of the consent decree provides in part: "This Court shall retain jurisdiction of this Consent Decree for purposes of ensuring compliance with ... its terms and conditions." See Dravo Corp. v. Zuber, 804 F.Supp. 1182 (D.Neb.1992) (contribution protection is contingent on continued compliance with the terms of the consent decree). The Dravo court stated:

Absent a showing that the settling defendants are not now in compliance with the order, and there is none, there is no factual basis upon which one can conclude that the settling defendants ... failed to do something which would have caused a default terminating the contribution bar. Id.

Here, there is evidence of a default which would terminate the contribution bar; CERC's failure to pay the $100,000 required under the decree. CERC may not claim protection arising from a decree as to which it is in default.²

Alternatively, even if CERC were not in default, it still could not claim the protection of § 9613(f)(2). The protection contemplated by § 9613(f)(2) covers not just claims for contribution, but claims for response costs that amount to nothing more than claims for contribution. Dravo, 804 F.Supp. at 1185. This protection, however, is limited to "matters addressed in the settlement." 42 U.S.C. § 9613(f)(2).

"The proper inquiry for determining whether a consent decree covers the same subject matter as a contribution claim is a comparison of the `particular hazardous substances at issue in the settlement, the location of the site in question, the time frame covered by the settlement, and the cost of the cleanup.'" Akzo Coatings, Inc. v. Aigner Corp., 803 F.Supp. 1380, 1385 (N.D.Ind.1992), quoting United States v. Union Gas Co., 743 F.Supp. 1144, 1154 (E.D.Pa.1990). See also United States v. Pretty Products, Inc., 780 F.Supp. 1488, 1494-95, n. 4 (S.D.Ohio 1991).

CERC's consent decree does not contain a section specifically addressing contribution protection. Therefore, the scope of contribution protection must be determined from other portions of the document.

It is clear that Farmland's claims concern the same hazardous substances and site as the consent decree. However, Paragraph IV A of CERC's consent decree states:

"Payment shall constitute full satisfaction of the United States' claims against CERC for past response costs not recovered pursuant to previously entered consent decrees in this matter with McKesson Corporation, Farmland Industries, Inc. and Maytag Corporation."

The agreement, therefore, may be read as extending only to response costs incurred by the government but not recovered in earlier settlements which would not include the costs Farmland incurred as a result of CERC's alleged conduct. See Transtech Industries, Inc. v. A & Z Septic Clean, 798 F.Supp. 1079, 1090 (D.N.J.1992) (contribution protection applies only to claims specifically addressed in the consent decree, not to every possible claim arising out of the same site).

Therefore, it cannot be said that there is no genuine issue of material fact as to the scope of the contribution protection afforded by CERC's consent decree.

III. THE CERC PARTIES' MOTION TO DISMISS.

The CERC parties challenge this court's jurisdiction over Farmland's pendent state claims. Under the doctrine of pendent jurisdiction, a federal court has discretion to try a plaintiff's state and federal claims in one proceeding if: (1) the federal claim is substantial, (2) both the federal and state claims derive from a common nucleus of operative fact, and (3) the claims are so related that the parties would expect to try them all in one proceeding. United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

However, when "it appears that the state issues substantially predominate, whether in terms of proof, or the scope of issues raised, or the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals." Gibbs, 383 U.S. at 726-27, 86 S.Ct. at 1139-40.

The CERC parties contend that Farmland's state claims would predominate at trial. I agree.

The evidence involved in state tort claims...