Alloy Briquetting Corp. v. Niagara Vest, Inc.

• Decision Date: 30 September 1992
• Docket Number: No. 90-CV-805S.,90-CV-805S.
• Citation: 802 F. Supp. 943
• Parties: ALLOY BRIQUETTING CORPORATION, Plaintiff, v. NIAGARA VEST, INC. and Union Carbide Corporation, Defendants.
• Court: U.S. District Court — Western District of New York

802 F. Supp. 943

ALLOY BRIQUETTING CORPORATION, Plaintiff, v. NIAGARA VEST, INC. and Union Carbide Corporation, Defendants.

No. 90-CV-805S.

United States District Court, W.D. New York.

September 30, 1992.

Richard G. Collins, Buffalo, N.Y., John J. DelMonte, Niagara Falls, N.Y., for plaintiff.

Thomas E. Reidy, Nixon, Hargrave, Devans & Doyle, Rochester, N.Y., Mark R. McNamara, Moot & Sprague, Buffalo, N.Y., for defendant.

DECISION AND ORDER

SKRETNY, District Judge.

INTRODUCTION

Plaintiff commenced this action on August 1, 1990, seeking to recover, under various federal and state law theories, the costs plaintiff allegedly has incurred or will incur to clean up the alleged chemical contamination of certain property located in Niagara Falls, New York (the "Site"). Jurisdiction is predicated on 28 U.S.C. § 1331, § 113(b) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9613(b), and this Court's supplemental jurisdiction. 28 U.S.C. § 1367.

Plaintiff's second amended complaint (the "amended complaint") alleges that the plaintiff had leased the Site from Niagara Vest, the current owner of the Site.¹ Plaintiff further alleges that Union Carbide owned the Site prior to Niagara Vest, and for over forty years had occupied the Site and operated a manufacturing facility on it. Additionally, plaintiff alleges that during the course of its operations, Union Carbide handled, used, stored and disposed of hazardous substances on the Site and adjacent property, and that following Niagara Vest's acquisition of the Site Niagara Vest caused or permitted the deposit and storage of hazardous substances, on property contiguous to the Site. Due to resulting releases of hazardous substances, plaintiff allegedly incurred response costs consistent with the national contingency plan.

In its amended complaint, plaintiff asserts five claims for relief against both of the defendants, and one additional claim for relief against Niagara Vest alone. Plaintiff's first claim for relief is premised upon Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), which allows a private party to recover the "response costs" incurred in responding to a discharge or threatened discharge of hazardous materials (second amended complaint, pp. 6-9).²

The second claim for relief is based upon Section 113(f) of CERCLA, 42 U.S.C. § 9613(f), which provides a right of contribution against other parties who may be liable for the release or threatened release of toxic materials (C, pp. 9-10).

The third claim for relief is for common law restitution against the defendants for the costs that have been and will be incurred by the plaintiff as a result of contamination by the defendants (C, p. 10).

The fourth claim for relief seeks a declaratory judgment setting forth the respective rights and obligations of the parties with regard to the contamination. Plaintiff asks that this Court apportion the liability for past and future response costs on the basis of liability (C, pp. 11-12).

The fifth claim for relief seeks common law indemnity against the defendants (C, pp. 12-13).

The sixth and final claim for relief is a fraud claim against Niagara Vest alone. Plaintiff alleges that while it was negotiating the lease of the Site with Niagara Vest, high-level employees of Niagara Vest represented that the Site was free of hazardous materials. Moreover, the plaintiff indicates that a paragraph in the "agreement of sale" executed by the plaintiff and Niagara Vest contains an affirmative covenant that the Site was not contaminated. The plaintiff alleges that it relied upon these false statements when entering the agreement, and that Niagara Vest is liable for fraud (C, pp. 13-16).

It should be noted at the outset that plaintiff refers throughout the amended complaint to future response costs that may be incurred in dealing with contamination at or near the Site. Plaintiff now submits that all such references refer only to future attorney fees and disbursements (P.M. pp. 10-11). Whether or not these costs are recoverable in this litigation will be addressed below.

The defendants seek the following relief in their motion to dismiss: (1) dismissal of each claim for relief insofar as it seeks recovery of attorney fees; (2) dismissal of plaintiff's second claim for relief in its entirety; (3) dismissal of plaintiff's fourth claim for relief in its entirety; and (4) striking from the second amended complaint all references to and requests for recovery of future response costs. These requests will be addressed seriatim.

ATTORNEY FEES

The defendants argue that plaintiff has no right to be reimbursed for attorney fees incurred in the prosecution of this lawsuit (D.M. pp. 3-11). On the other hand, plaintiff argues that CERCLA awards attorney fees to a private plaintiff who has responded to the release of a hazardous substance (P.M. pp. 4-8). This issue has not yet been considered by the Second Circuit, and there is a considerable split of authority among various district courts. Therefore, this issue will be addressed at some length by this Court.

It is well-established that, absent a contractual or statutory provision, the prevailing litigant cannot recover attorney fees from the losing party. Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 262, 95 S.Ct. 1612, 1624, 44 L.Ed.2d 141 (1975). "Absent explicit congressional authorization, attorneys' fees are not a recoverable cost of litigation." Runyon v. McCrary, 427 U.S. 160, 185, 96 S.Ct. 2586, 2601, 49 L.Ed.2d 415 (1976). Because plaintiff is relying on the provisions of CERCLA to recover attorney fees, this Court must examine the statutory language of CERCLA and, where necessary, the legislative history, to determine whether Congress has explicitly authorized attorney fees. To find such an authorization, this Court must find more than "generalized commands," Runyon v. McCrary, 427 U.S. at 186, 96 S.Ct. at 2602; rather, it must find a "clear expression of Congress' intent." General Electric v. Litton Indus. Automation Systems, 920 F.2d 1415, 1421 (8th Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 1390, 113 L.Ed.2d 446 (1991).

In demanding attorney fees, plaintiff relies on the "plain and ordinary meaning" of 42 U.S.C. § 9607(a)(4)(B) (P.M., p. 4). This section enables a private party to recover from another person the "necessary costs of response" incurred in dealing with the release of hazardous substances. "Response" is defined by 42 U.S.C. § 9601(25) as "remove, removal, remedy, and remedial action, all such terms (including the terms `removal' and `remedial action') include enforcement activities related thereto." The question then becomes whether attorney fees are recoverable as "necessary costs" of "enforcement activities" related to the removal of hazardous substances. CERCLA does not define the term "enforcement actions," and, contrary to the argument of plaintiff, this Court does not believe that the term has a "plain and ordinary meaning." Therefore, the term must be examined in its statutory context and in light of its legislative history.

Congress added "enforcement activities" to the category of response costs in its 1986 amendments to CERCLA.³ The Report of the House Committee on Energy and Commerce regarding H.R. 2817⁴ explains that the addition of this language "will confirm EPA's authority to recover costs for enforcement actions taken against responsible parties." H.R.Rep. No. 253, 99th Cong., 1st Sess., pt. 1, at 66, reprinted in 1986 U.S. CODE CONG. & ADMIN. NEWS 2835, 2848-49. Significantly, no mention is made of "enforcement actions" undertaken by private parties, and the amendment appears to relate only to cost recovery actions undertaken by the government under 42 U.S.C. § 9607(a)(4)(A), which imposes liability for "all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe...." Such a reading of the statute is consistent with case law indicating that "private parties do not incur `enforcement costs' as contemplated by CERCLA." T & E Industries, Inc. v. Safety Light Corp., 680 F.Supp. 696, 708, n. 13 (D.N.J.1988).

Furthermore, 42 U.S.C. § 9607(a)(4)(A) must be read in connection with 42 U.S.C. § 9604(b)(1), authorizing the President "to undertake such planning, legal, fiscal, economic, engineering, architectural, and other studies or investigations as he may deem necessary or appropriate to plan and direct response actions, to recover the costs thereof, and to enforce the provisions of this chapter." This section is a further indication that Congress intended that the government recover the litigation costs of enforcing CERCLA. No corresponding statute exists which extends this right to private plaintiffs.

In view of the statutory context and legislative history, this Court declines plaintiff's invitation to join the courts holding that private plaintiffs can initiate "enforcement actions" within the meaning of CERCLA, and thereby recover litigation costs. General Electric v. Litton Indus. Automation Systems, 920 F.2d 1415 (8th Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 1390, 113 L.Ed.2d 446 (1991); Pease and Curren Refining, Inc. v. Spectrolab, Inc., 744 F.Supp. 945 (D.C.Cal.1990); Gopher Oil Co. v. Union Oil Co., 757 F.Supp. 998 (D.Minn.1991); and Jersey City Redevelopment Authority v. PPG Industries, Inc., 866 F.2d 1411 (3d Cir.1988).

Even if private party cost recovery suits could be characterized as "enforcement actions" under CERCLA, the statutory language would still fall far short of "explicit congressional authorization" for attorney fees. Litton, 920 F.2d at 1421. "Many courts have found that CERCLA lacks the specificity required under the Alyeska and Runyon holdings." Fallowfield Development Corp. v. Strunk, 766 F.Supp. 335 (E.D.Pa.1991), citing Mesiti v. Microdot, Inc., 739 F.Supp. 57, 62-63 (D.N.H.1990), Regan v. Cherry Corp., 706 F.Supp. 145, 148-50 (D.R.I.1989),...