Ashley Ii of Charleston Llc v. Pcs Nitrogen Inc.

• Decision Date: 13 October 2010
• Docket Number: Civil Action No. 2:05–cv–2782–MBS.
• Citation: 746 F.Supp.2d 692
• Court: U.S. District Court — District of South Carolina
• Parties: ASHLEY II OF CHARLESTON, LLC, Plaintiff,v.PCS NITROGEN, INC., Defendant/Third–Party Plaintiff,v.Ross Development Corporation; J. Holcombe Enterprises, L.P.; James H. Holcombe; J. Henry Fair, Jr.; Allwaste Tank Cleaning, Inc. n/k/a PSC Container Services, LLC; Robin Hood Container Express, Inc.; City of Charleston, South Carolina, Third–Party Defendants.

746 F.Supp.2d 692

ASHLEY II OF CHARLESTON, LLC, Plaintiff,

v.PCS NITROGEN, INC., Defendant/Third–Party Plaintiff,

v.Ross Development Corporation; J. Holcombe Enterprises, L.P.; James H. Holcombe; J. Henry Fair, Jr.; Allwaste Tank Cleaning, Inc. n/k/a PSC Container Services, LLC; Robin Hood Container Express, Inc.; City of Charleston, South Carolina, Third–Party Defendants.

Civil Action No. 2:05–cv–2782–MBS.

United States District Court, D. South Carolina, Charleston Division.

Oct. 13, 2010.

Background: Brownfield site owner brought action against successor-in-interest to former site owner that operated fertilizer granulation plant on site, seeking to recover remediation costs under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Successor-in-interest subsequently filed contribution claims against current and former site owners. Bench trial was held.

Holdings: The District Court, Margaret B. Seymour, J., held that:

(1) purchase and sale agreement between owner and previous owner that operated storage facility on site released previous owner from any liability under CERCLA;

(2) successor-in-interest was potentially responsible party (PRP) subject to liability for response costs;

(3) environmental harm at site was indivisible;

(4) commercial property developer that engaged in earthmoving activities on site could not rely on innocent landowner defense; and

(5) current owner could not rely on bona fide prospective purchaser defense.

Ordered accordingly.

Joseph Rutledge Young, Jr., William Leroy Howard, Sr., Young, Clement, Rivers and Tisdale, Charleston, SC, James Jerome Hartzell, Hartzell and Whiteman, Thomas N. Barefoot, Thomas N. Barefoot Law Offices, Raleigh, NC, for Plaintiff.

Carmen G. McLean, John Buchanan Williams, Kevin P. Holewinski, Michael Howard Ginsberg, Jones Day, Washington, DC, William Howell Morrison, Moore and Van Allen, Charleston, SC, for Defendant/Third–Party Plaintiff.Robert Bryan Barnes, Thomas McRoy Shelley, III, Rogers Townsend and Thomas, Alexander G. Shissias, Haynsworth Sinkler Boyd, Clarke W. Dubose, Columbia, SC, Amy Elizabeth Melvin, Timothy William Bouch, Leath, Bouch and Crawford, Jason Scott Luck, Seibels Law Firm, Charleston, SC, for Third–Party Defendants.

AMENDED ORDER AND OPINION

MARGARET B. SEYMOUR, District Judge.

This is a cost-recovery action brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. §§ 9601, et seq., to recover costs incurred to remediate 33.95 acres of a 43 acre parcel of land in Charleston, South Carolina (“the Site”). On September 26, 2005, this lawsuit was filed under CERCLA § 107 (42 U.S.C. § 9607) by one of the Site's current owners, Ashley II of Charleston, LLC (“Ashley”), against PCS Nitrogen, Inc. (“PCS”), seeking a declaratory judgment that PCS is jointly and severally liable for the cost of remediating the Site; and a money judgment in the amount of $194,232.94 to reimburse Ashley for costs of remediation that it has already incurred. [Entry 1 at ¶¶ 28–36; Entry 209 at ¶¶ 31–37]. This court has jurisdiction pursuant to 28 U.S.C. § 1331 and CERCLA. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b) and (c), and 42 U.S.C. § 9613 because the claims arise, and the releases of hazardous substances occurred at the Site, which is located in the District of South Carolina.

PCS filed contribution claims pursuant to CERCLA § 113(f)(1) against Ashley, Ross Development Corporation (“Ross”); Koninklijke DSM N.V., and DSM Chemicals of North America, Inc. (collectively “the DSM Parties”); James H. Holcombe (“Holcombe”), J. Holcombe Enterprises, L.P. (“Holcombe Enterprises”), and J. Henry Fair, Jr. (“Fair”) (collectively “The Holcombe and Fair Parties”); Allwaste Tank Cleaning (n/k/a PSC Container Services, LLC) (“Allwaste”); Robin Hood Container Express, Inc. (“RHCE”); and the City of Charleston, South Carolina (“the City”), alleging that they are potentially responsible parties (“PRPs”).¹ [Entry 226].

Pursuant to § 113 of CERCLA, Ross filed counterclaims against PCS and cross-claims against the Holcombe and Fair Parties, the DSM Parties, RHCE, the City, and Allwaste. [Entry 239 at 12–18]. RHCE filed § 113 counterclaims against PCS and cross claims against the DSM Parties, the Holcombe and Fair Parties, Allwaste, and the City. [Entry 231 at 8–11]. The Holcombe and Fair Parties have filed counterclaims against PCS and cross-claims against Ross and the DSM Parties pursuant to § 113. [Entry 234 at 10–12]. The City has filed a § 113 counterclaim against PCS. [Entry 228 at 7–8]. PCS, Ross, RCHE, the Holcombe and Fair Parties, and the City all seek a judicial determination of their rights to future cost recovery and contribution pursuant to 28 U.S.C. §§ 2201 and 2202. [Entry 226 ¶ 50; Entry 231 ¶ 50; Entry 234 ¶¶ 55, 63; Entry 228 at 9].

This case was bifurcated into liability and allocation phases by order of The Honorable C. Weston Houck on July 25, 2006. [Entry 56]. From February 20, 2007 to February 22, 2007, Judge Houck held a bench trial for the liability phase. [Entries 107, 108, 109 and 115]. On September 28, 2007, 2007 WL 2893372, pursuant to Federal Rule of Civil Procedure 52, Judge Houck entered Findings of Fact and Conclusions of Law determining PCS to be the successor-in-interest to former Site owner, Columbia Nitrogen Corporation (“CNC”). [Entry 118]. On January 5, 2009, Judge Houck disqualified himself from further participation in the case. [Entries 307 and 308]. The case was reassigned to the undersigned on January 6, 2009. [Entries 307 and 308].² On August 13, 2009, this court granted summary judgment to the DSM Parties. [Entry 409].

From October 26, 2009 to November 6, 2009 and continuing from January 19, 2010 to January 27, 2010, the court held a bench trial for the allocation phase. [Entries 472, 473, 475–478, 480, 483, and 484]. This case is currently before the court on three motions for judgment on partial findings filed during trial by Allwaste, the Holcombe and Fair Parties, and RHCE [Entries 517, 520 and 521]; as well as findings of fact and conclusions of law as to allocation pursuant to Federal Rule of Civil Procedure 52(a). On June 2, 2010, each of the parties submitted proposed findings of fact and conclusions of law. PCS's responses to the motions for judgment on partial findings were contained within its proposed findings. [Entries 556–558].

Federal Rule of Civil Procedure 52(c), which governs judgments on partial findings, provides in pertinent part:

If a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue. The court may, however, decline to render any judgment until the close of the evidence.

Judgments entered pursuant to Rule 52(c) “must be supported by findings of fact and conclusions of law.” Fed.R.Civ.P. 52(c). Under Rule 52(c), a court assesses the evidence and may enter a judgment if the evidence is insufficient to support a claim or defense. See generally Carter v. Ball, 33 F.3d 450 (4th Cir.1994); Fed.R.Civ.P. 52. Rule 52(a) directs that when an action is tried without a jury, a court “must find the facts specially and state its conclusions of law separately.” Fed.R.Civ.P. 52(a). Having carefully considered the testimony, exhibits, deposition excerpts, trial briefs, and proposed findings of fact and conclusions of law, the court makes the following findings.

I. FINDINGS OF FACT

A. Current Site Conditions

1. The property at issue consists of approximately forty-three acres in the Upper Peninsula area of Charleston, South Carolina, and is located at the end of Milford Street, abutting the Ashley River. [Ash. Ex. 162, 195]. The westernmost 33.95 acres of the property is the area that requires remediation and is the area referred to as “the Site.” [Entry 194 at 12].

2. Ashley seeks reimbursement of $194,232.94 in costs associated with the remediation of the Site. The costs claimed are itemized with invoices. [Ash. Exs. 231, 232, 247, 248, 250, 251, 252]. The listed costs were actually paid by Ashley. [Ash. Exs. 231, 232, 247, 248, 250, 251, 252].

3. The environmental conditions at the Site have been comprehensively studied and investigated by experts, including experts from the United States Environmental Protection Agency (“EPA”) and the South Carolina Department of Health and Environmental Control (“DHEC”). [Ash. Ex. 256, at 9–13; Trial Tr. 23:10–16].

4. There are four conditions at the Site that the remediation seeks to correct: arsenic contamination, lead contamination, low pH, and carcinogenic polyaromatic hydrocarbon (“cPAH”) contamination. [PCS Exs. 216, 218; Trial Tr. 1298:514; Ash. Exs. 91, 162].

5. Arsenic and lead contamination are found across the entire Site. [Ash. Ex. 140, Trial Tr. 646:3–24, 663:22].

6. The contamination at the Site is related to historic operations of a fertilizer plant at the Site. As part of the fertilizer manufacturing process, pyrite ore was burned as feedstock to create sulfuric acid. [PCS Ex. 1 at 7; PCS Ex. 218 at 1–2]. Cinders of pyrite ore that “did not burn completely in the combustion process” resulted in the creation of pyrite slag. [PCS Ex. 1 at 15; PCS Ex. 218 at 1–2]. Pyrite slag contains arsenic and lead. [Trial Tr. 649:10–19, 892:23–893:4, 914:4–7, 1059:3–5, 1451:7–14].

7. The use of pyrite ore in fertilizer manufacturing operations is the source of the vast majority of the arsenic contamination at the Site. [Trial Tr. 637:2–4, 899:1–5, 1900:19–22].

8. Another source of lead at the Site, other than pyrite slag, is lead sludge that was rinsed from lead acid chambers, which were used to make sulfuric acid during the operation of the fertilizer plant. [Trial Tr. 892:23–893:4, 1449:13–20; PCS Ex. 218 at 1, 10; ...