Allied Towing v. Great Eastern Petroleum Corp.

• Decision Date: 21 August 1986
• Docket Number: Civ. A. No. 85-808-N.
• Citation: 642 F. Supp. 1339
• Parties: ALLIED TOWING CORPORATION, Plaintiff, v. GREAT EASTERN PETROLEUM CORPORATION, Allied Petroleum, Inc., and Petroferm U.S.A., Inc., Defendants, and PUBLICKER INDUSTRIES, INC., Defendant and Third-Party Plaintiff, v. SEALAND LTD. and Philadelphia Gas Works, Third-Party Defendants.
• Court: U.S. District Court — Eastern District of Virginia

642 F. Supp. 1339

ALLIED TOWING CORPORATION, Plaintiff, v. GREAT EASTERN PETROLEUM CORPORATION, Allied Petroleum, Inc., and Petroferm U.S.A., Inc., Defendants, and PUBLICKER INDUSTRIES, INC., Defendant and Third-Party Plaintiff, v. SEALAND LTD. and Philadelphia Gas Works, Third-Party Defendants.

Civ. A. No. 85-808-N.

United States District Court, E.D. Virginia, Norfolk Division.

August 21, 1986.

COPYRIGHT MATERIAL OMITTED

Morton H. Clark, Carter T. Gunn, Vandeventer, Black, Meredith & Martin, Norfolk, Va., for plaintiff.

Daniel R. Warman, Williams, Worrell, Kelly & Greer, Norfolk, Va., for Allied Petroleum, Inc.

Waverley L. Berkley, III, Jett, Agelasto, Berkley, Furr & Price, Norfolk, Va., for Great Eastern Petroleum Corp.

F. Bradford Stillman, McGuire, Woods & Battle, Norfolk, Va., for Petroferm U.S.A., Inc.

Harvey Cohen, Joanne Alper, Cohen, Gettings, Alper & Dunham, Arlington, Va., for Publicker Industries.

William B. Eley, Walter D. Kelley, Jr., Marie L. Achtemeier, Willcox & Savage, Norfolk, Va., Tyler E. Wren, Obermayer, Rebmann, Maxwell & Hippel, Philadelphia, Pa., for Philadelphia Gas Works.

OPINION AND ORDER

DOUMAR, District Judge.

In this action, the plaintiff, Allied Towing Corporation, seeks damages and equitable relief from a number of defendants. These defendants have, in response, filed numerous third-party actions and counterclaims against the plaintiff and each other. Additionally, all the defendants, save two, have filed motions to dismiss the initial complaint and/or various derivative complaints. These matters have been exhaustively briefed. In order to simplify the Court's consideration of the issues presented therein, this opinion will begin with a brief recitation of the facts as alleged,¹ and the case's procedural history and then will proceed to consider the motions to dismiss Allied Towing's complaint, and then the motions to dismiss the pending third-party actions.

I.

1. FACTS

Philadelphia Gas Works (PGW) is a natural gas distribution company owned by the City of Philadelphia and operated by the Philadelphia Facilities Management Corporation. During the 1970's PGW obtained a portion of its gas supply from a manufacturing process that converted fuel oil into gas. PGW on occasion accepted bids for the sale of the oil-based by-product this process produced. In the fall of 1982, a representative of Sealand Ltd. (Sealand) visited PGW's Passyunk facility in Philadelphia to inspect a quantity of this liquid in anticipation of such a bid. In February of 1983, PGW accepted Sealand's ultimate bid of $.01 per gallon for the material. This price was F.O.B. Philadelphia at the Passyunk wharf on the Schuykill River. In June of that year, Sealand arranged for the by-product to be removed from PGW's facility and transported to a tank farm owned by Publicker Industries, Inc. (Publicker).

When Sealand failed to pay for the tank rental, Publicker, apparently exercising its warehouseman's lien, seized the material and attempted to sell it. In April of 1985, Publicker sold 1,000,000 gallons of the material to Great Eastern Petroleum Corp. (Great Eastern) for $1.00. Great Eastern and Petroferm USA, Inc. (Petroferm) subsequently formed a joint venture to resell the by-product. They found a buyer in Allied Petroleum, Inc. (Petroleum) who allegedly believed the liquid to be 60% No. 6 oil and 40% water.² To complete the sale, Great Eastern contacted Allied Towing (Towing) to arrange the transport of the No. 6 oil mixture from Publicker's Philadelphia facility to Norfolk, Virginia. Initially, Towing understood that Great Eastern was to pay freight, demurrage and cleanup costs, but subsequent correspondence indicated that Towing was to look to Petroleum for payment. From October 29 through 31 of 1985, approximately 25,000 barrels³ of the by-product were loaded onto Towing's Barge ATC-3062 in Philadelphia. Towing never suspected that the liquid entering the hold of its barge was anything other than an oil-water mixture.

When the barge arrived in Virginia, Petroleum determined that the liquid was not No. 6 oil and water and rejected the shipment. Towing then contacted PGW, Publicker, Great Eastern, and Petroferm. All denied liability and refused to arrange for the product's removal.

Towing also contacted the Environmental Protection Agency (EPA) which, in turn, "deferred" to the Virginia Division of Solid and Hazardous Waste Management. Samples of the substance were analyzed by a variety of laboratories, including the EPA's. While the results of these tests conflict in many key respects, all those who have tested the substance have concluded that its "flashpoint" is extremely low. Towing contends that the flashpoint of individual samples ranged from 74 degrees to 80 degrees F. and that a subsequent test indicated a composite flashpoint of 118 degrees F.

This, Towing contends, makes the material a hazardous waste within the meaning of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6987. Barge ATC-3062 is neither equipped nor certified to carry hazardous substances. As a result, both the EPA and the Commonwealth of Virginia have allegedly threatened Towing with substantial civil penalties for operating an unlicensed hazardous waste facility. According to Towing, only three barges of this type exist on the East Coast; the other two are owned by competitors who have now taken Towing's once substantial lighterage business. Additionally, Towing contends it has received no payment for the use of its barge. Petroleum, the company to which Towing first turned for relief, has submitted an affidavit to the Court indicating that it is without funds, even to pay its legal counsel in this matter, and cannot pay for the use of Towing's barge. As a result, Towing now contends that it is potentially liable for civil penalties and for the removal of a substance placed at its doorstep much like a foundling, with no social or adoptive agency ready to assume responsibility for its appropriate disposition. If Towing is correct, the material's continued presence in its barge imminently and substantially endangers the health and the environment of Virginia and its citizens.

2. PROCEDURAL HISTORY

Towing filed its initial complaint in this case on November 25, 1985 against Great Eastern and Petroleum. The complaint invoked the admiralty jurisdiction of this Court and prayed for damages, costs and attorney's fees. On January 2, 1986, Towing amended the complaint to state new claims based on tort and warranty theories and one based on Great Eastern's "failure to properly identify the product as a dangerous and hazardous cargo pursuant to Title 46 of the Code of Federal Regulations." First Amended Complaint at ¶ 2. The amendment also added a prayer for declaratory and injunctive relief. On January 13, 1986, Petroleum filed a third-party complaint against Petroferm.

On January 27, 1986, Towing filed a motion for a preliminary injunction. The matter was heard on February 7, 1986. The Court reserved ruling on the motion and the parties entered into intensive efforts to resolve the most pressing disputes without a judicial decree. Representatives of each litigant then involved, the Virginia Attorney General's Office, the State's Waste Management Office and the Court attempted to reach an agreeable, interim, if not ultimate, resolution to the controversy. This was not possible.

On March 25, Towing filed its second amended complaint, adding Publicker as a defendant. This complaint reasserted the maritime, warranty and tort claims alleged in the first complaint as amended, and articulated for the first time claims expressly based on RCRA and on the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9607(a). On April 16, Petroleum's third-party claim against Petroferm was dismissed without prejudice.

On May 15, Publicker filed a motion to dismiss Towing's complaint, a cross-claim against Great Eastern, and third-party claims against Sealand and PGW. Great Eastern filed cross-claims against Petroleum, Petroferm, and Publicker. Petroferm filed cross-claims against Great Eastern and Publicker. Motions to dismiss various claims have been received from a number of parties; to these motions the Court now turns.

II.

1. Publicker's Motion to Dismiss Towing's Complaint

A. Count I—RCRA and the defendant's right to notice

In Count I of its second amended complaint, Towing alleges a cause of action based on the "citizen suit" provisions of the Resources Conservation and Recovery Act, 42 U.S.C. § 6972. Publicker contends that Count I fails to state a claim upon which relief can be granted or, alternatively, that this Court is without subject matter jurisdiction to hear the RCRA claim.

In support of its motion, Publicker draws upon the RCRA "notice" provisions codified at 42 U.S.C. § 6972(b). That subsection provides that:

(1) No action may be commenced under subsection (a)(1)(A) of this section—

(A) prior to 60 days after the plaintiff has given notice of the violation to—

(i) the Administrator;

(ii) the State in which the alleged violation occurs; and

(iii) to any alleged violator of such permit, standard, regulation, condition, requirement, prohibition, or order, except that such action may be brought immediately after such notification in the case of an action under this section respecting a violation of subtitle C of this Act 42 USCS §§ 6921 et seq.; or

(B) if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States or a State to require compliance with such permit, standard, regulation, condition, requirement, prohibition, or order.

In any such action under subsection (a)(1)(A) in a court of the United States, any person may intervene as a matter of right.

(2)(A) No action may be commenced under subsection (a)(1)(B) of this section prior to ninety days after the plaintiff has given notice

...