972 F.2d 1527 (10th Cir. 1992), 91-1093, Daigle v. Shell Oil Co.

Docket Nº:91-1093, 91-1099 and 91-1143 to 91-1145.
Citation:972 F.2d 1527
Party Name:Ira P. DAIGLE and Mary L. Daigle; John Beaver and Mary Winter; Donald E. Bonner and Julie A. Bonner, and as parents, natural guardians and next friends of Jamie Bonner and Julie A. Bonner as parent, legal guardian and next friend of Stephanie Palaoro; Jay Brown and Mary Jane Brown; Johnny Ray Brown; Emma C. Anderes; Carl J. Buschman and Jeanette Bu
Case Date:August 18, 1992
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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972 F.2d 1527 (10th Cir. 1992)

Ira P. DAIGLE and Mary L. Daigle; John Beaver and Mary

Winter; Donald E. Bonner and Julie A. Bonner, and as

parents, natural guardians and next friends of Jamie Bonner

and Julie A. Bonner as parent, legal guardian and next

friend of Stephanie Palaoro; Jay Brown and Mary Jane

Brown; Johnny Ray Brown; Emma C. Anderes; Carl J.

Buschman and Jeanette Buschman, and as parents, natural

guardians and next friends of Catherine L. Buschman; Trudy

J. Clark; Wayne Crum; Diana Crum; Don S. Daigle and Julie

L. Daigle, and as parents, natural guardians and next

friends of Justin S. Daigle, Travis S. Daigle and Elizabeth

M. Daigle; Douglas D. Daigle and Felecia M. Daigle, and as

parents, natural guardians and next friends of Shane R.

Daigle, Amanda M. Daigle and Melissa D. Daigle; John Dowd;

Violet St. Dennis; Alvin Dowd; Mary E. Fuller; Mary

Holmes; Dorothy Waller; Jeffery A. Hudson and Brita A.

Hudson, and as parents, natural guardians and next friends

of Christina D. Hudson; Stephanie Izzo; Thomas Izzo;

Michael Jennings and Mindy Jennings, and as parents, natural

guardians and next friends of Hanna Adel Jennings, Jessica

Ann Jennings and Michael Jedidiah Jennings; Gordon Allen

MacDonald; Robert Joseph MacDonald; Herbert L. Maes;

Edward J. Mikec; Pearl C. Myers; Gary Phillips and Leeanne

Phillips, and as parents, natural guardians and next friends

of Karen Phillips and Lea Ann Phillips as parent, legal

guardian and next friend of Donald Taylor; Elmae M. Rice;

Erwin W. Rice and Karlene K. Rice and as parents, natural

guardians and next friends of Arlo Rice; Paula Rice; Roger

Rice; Porter Richardson; Carolyn M. Roberts; James B.

Roberts; Alma Roberts; Ernest G. Trujillo and Charlotte

Ann Trujillo, and as parents, natural guardians and next

friends of Jessica J. Trujillo and Emily M. Trujillo; James

E. Walters; Helen L. Walters; Rudy L. Martinez, and as

parent, natural guardian and next friend of Edward Paul

Martinez; Julian Montoya and Gloria Montoya, and as

parents, natural guardians and next friends of Jesse

Montoya; Louise Dean; Fred Scoggins and Patricia Scoggins,

Plaintiffs-Appellees, Cross-Appellants,

v.

SHELL OIL COMPANY, Defendant-Appellant, Cross-Appellee,

and

United States of America, Defendant-Appellant, Cross-Appellee.

ROCKWELL INTERNATIONAL CORPORATION, Amicus Curiae.

Nos. 91-1093, 91-1099 and 91-1143 to 91-1145.

United States Court of Appeals, Tenth Circuit

August 18, 1992

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Anthony Roisman of Cohen, Milstein, Hausfeld & Toll, Washington, D.C. (Ann C. Yahner, Michael D. Hausfeld, Cohen, Milstein, Hausfeld & Toll, Kathleen Mullen, John R. Holland, Denver, Colo., Howard Sedran, Levin, Fishbein, Sedran & Berman, Philadelphia, Pa., with him, on the brief), for Daigle, et al.

Linnea Brown, Holme Roberts & Owen, Denver, Colo. (Edward J. McGrath and Robert Tuchman, Holme Roberts & Owen, with her, on the brief), for Shell Oil Co.

Edward J. Shawaker, Atty., Environmental and Natural Resources Div., and Steven M. Talson, Atty., Torts Branch, Civ. Div., Dept. of Justice, Washington, D.C. (Richard B. Stewart and Stuart M. Gerson, Asst. Attys. Gen., Barry M. Hartman, Acting Asst. Atty. Gen., J. Patrick Glynn, Director, and J. Charles Kruse, Sp. Litigation Counsel, Torts Branch, Civ. Div., Anne S. Almy, Bradley S. Bridgewater and David A. Carson, Attys., Environmental and Natural Resources Division, Dept. of Justice, Washington, D.C., with them, on the brief), for U.S.

Joseph J. Bronesky, Sherman & Howard, Denver, Colo., John D. Aldock, Franklin D. Kramer, Micahel S. Giannotto, Joseph F. Yenouskas, Shea & Gardner, Washington, D.C., for amicus curiae Rockwell Intern. Corp. in support of Shell Oil Co.

Before LOGAN, MOORE and BALDOCK, Circuit Judges.

BALDOCK, Circuit Judge.

This toxic tort case arises from the cleanup effort at the Rocky Mountain Arsenal (the Arsenal), a federally controlled Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) site near Commerce City, Colorado. 42 U.S.C.A. § 9601 et seq. The Plaintiffs-appellees, a group of individuals who reside near the Arsenal, seek "response costs" from Defendants-appellants Shell Oil Company (Shell) and the Government for medical monitoring under CERCLA § 107(a), 42 U.S.C.A. § 9607(a), and damages from Shell under six diversity claims including an "ultrahazardous activity" strict liability claim. These latter tort claims also were brought against the Government pursuant to the Federal Tort Claims Act (FTCA). 28 U.S.C.A. §§ 1346(a) and 2671-2680. Plaintiffs contend that they suffered personal injury and property damage as a result of airborne pollutants released during the joint cleanup effort at the Arsenal by Shell and the Government.

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Shell filed a Rule 12(b)(6) motion to dismiss the CERCLA claim and the ultrahazardous activity claim. The Government filed a separate Rule 12(b)(6) motion to dismiss the CERCLA claim as well as a Rule 12(b)(1) motion to dismiss all the tort claims for lack of subject matter jurisdiction under the FTCA. With some uncertainty because of the factual immaturity of the case and the complete lack of appellate guidance, the district court denied the motions to dismiss the CERCLA medical monitoring claims. The court also denied Shell's motion to dismiss the ultrahazardous activity claim. But the court granted the Government's Rule 12(b)(1) motion to dismiss the FTCA claims, holding that it lacked subject matter jurisdiction because the Government's cleanup activities fell under the discretionary function exception to the FTCA waiver of sovereign immunity. See 28 U.S.C.A. § 2680(a).

Shell and the Government appeal, contending that "response costs" under CERCLA § 107(a) do not encompass medical monitoring costs. Shell also appeals the denial of its motion to dismiss the ultrahazardous activity claim, contending that Colorado courts would not classify the generation, treatment, storage and disposal of hazardous waste as an ultrahazardous activity giving rise to a strict liability claim. Plaintiffs cross-appeal the 12(b)(1) dismissal, contending that the Government's actions were not within the discretionary function exception. All issues have been certified under Fed.R.Civ.P. 54(b) for interlocutory review, and we exercise jurisdiction pursuant to 28 U.S.C.A. §§ 1291 and 1292(b).

We reverse the rulings denying dismissal of the CERCLA § 107(a) "response cost" claims against Shell and the Government. We affirm the order dismissing all of the FTCA claims against the Government, and we affirm the order denying dismissal of the ultrahazardous activity strict liability claim against Shell. The case is remanded to the district court for proceedings consistent with this opinion.

I. Background

This controversy stems from the year 1956, when the Army constructed and began using Basin F, a ninety-three acre hazardous waste surface impoundment on the Arsenal. The Army, as operator of the Arsenal, used Basin F to impound hazardous waste generated from its chemical warfare agent, chemical product and incendiary munition manufacturing activities. In addition, Shell used Basin F under lease from the Army to impound hazardous waste generated in its herbicide and pesticide manufacturing activities on the Arsenal. The combined activities of the Army and Shell on the Arsenal resulted in one of the worst hazardous waste pollution sites in the country, and Basin F is only a small portion of the problem. 1 Army officials have estimated that the twenty-seven square mile Arsenal has 120 contamination sites which contain huge quantities of liquid and solid wastes, some of which is unique because of the mixture of private herbicide and pesticide manufacturing activities with Army munitions manufacturing activities. See applt. app. at 342-43 (declaration of Donald L. Campbell, Deputy Program Manager, Army Program Manager's Office). Earnest response to these problems began in 1984, when the Army, with guidance from EPA, began a Remedial Investigation and Feasibility Study (RI/FS) pursuant to CERCLA § 104, 42 U.S.C.A. § 9604. 2 The purpose of this study was to identify contamination sites

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and determine the feasibility of proposed responses. As part of this extremely long and complex process, the Army identified fourteen specific sites which needed Interim Response Actions (IRA's) to stop the spread of contaminants so as to protect human health and the environment. As indicated by their classification, these actions were to take place in the interim, before the implementation of a permanent, remedial response. Basin F was among the fourteen priority sites.

Hazardous wastes apparently had leaked from Basin F into the surrounding environment for many years before the IRA finally began in April 1988. The IRA was taken as a joint effort by the Army and Shell in agreement with EPA and the State of Colorado. In accordance with the agreed upon plan, the government contracted Ebasco Constructors, Inc., a private contractor, to transfer the liquid hazardous waste from Basin F to on-site storage tanks and lined surface impoundments, move contaminated solids into a lined and capped waste pile, and place a clay cap, top soil and vegetation over soils remaining within the Basin. The bulk of this year-long process ended in March 1989 with the capping of the solid waste pile.

The parties involved in the Arsenal cleanup have litigated extensively in an effort to assign responsibility under CERCLA and various state statutes for the cleanup. This case, however, centers not on the necessary costs of the IRA but on alleged injuries resulting from the cleanup...

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