Channel Master Satellite v. JFD Electronics Corp.
| Decision Date | 13 September 1990 |
| Docket Number | No. 88-605-CIV-5-F.,88-605-CIV-5-F. |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | CHANNEL MASTER SATELLITE, SYSTEMS, INC., Plaintiff, v. JFD ELECTRONICS CORP., Harvey Finkel, and the Unimax Corporation, Defendants. |
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Richard W. Ellis, Smith, Helms, Mulliss & Moore, Raleigh, N.C., for plaintiff.
Cecil W. Harrison, Jr., Poyner & Spruill, Raleigh, N.C., for defendants.
Plaintiff, Channel Master Satellite Systems, Inc., ("Channel Master"), initiated this private party cost recovery action pursuant to Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"). That section provides, in pertinent part:
the owner and operator of ... a facility ... from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for ... any other necessary costs of response incurred by any other person consistent with the national contingency plan....
42 U.S.C. § 9607(a) (1986) (emphasis added). Channel Master has completed a "cleanup" of two areas of contamination located on its property in Oxford, North Carolina: (1) a surface impoundment, or sludge lagoon, and (2) an area of soil contaminated by Volatile Organic Compounds ("VOCs").1 Channel Master claims to have spent $3,395,377.90 on this cleanup, and seeks to recover this amount, plus its attorney's fees, from defendants. Defendants deny that they are liable for these costs.2
Defendants Unimax Corporation ("Unimax") and JFD Electronics Corporation ("JFD"),3 a wholly-owned subsidiary of Unimax, have filed a motion for partial summary judgment contending, inter alia, that plaintiff cannot show that the response costs for which it seeks compensation were "consistent" with the National Contingency Plan ("NCP"). For the reasons expressed infra, the court GRANTS said motion.
From September 1968 through October 1979, JFD operated a television antenna manufacturing facility at a 13.09 acre parcel of land in Oxford, North Carolina, which is the subject of this action (hereinafter "the Oxford site"). Channel Master subleased the Oxford site from JFD in October 1979, and operated the plant for a few months to "build out" the inventory. JFD owned a 1.46 acre portion of the Oxford Site, and bought the balance of the property on July 15, 1980. On the same day, JFD conveyed the entire Oxford site to Channel Master. Channel Master remained in possession from October 1979 through the date of purchase and thereafter.
A surface impoundment, or lagoon, was located just outside the plant building when Channel Master began occupying the premises in 1979. The lagoon had been built in the early sixties by prior owners of the business (ie., prior to JFD), as part of a treatment process for waste streams generated by the antenna manufacturing operations. The electroplating and chemical conversion processes used in the manufacture of these antennas produced waste water containing chromium and other heavy metals. JFD continued the manufacture of television antennas on the site while it occupied the site from September 1968 through October 1979, using the same waste water treatment process the previous owners of the site had constructed, including the lagoon.
While JFD occupied the Oxford site, it also allegedly contaminated an area of soil with VOCs; specifically, Trichloroethylene used to clean metal parts prior to electroplating and solvents used for general cleaning purposes.
After Channel Master had subleased the Oxford site, it also used the conversion coating lines and waste treatment facilities, including the lagoon, while "running out" its inventory purchase from JFD. Use of the lagoon ceased completely in early 1980, when Channel Master removed the antenna manufacturing equipment from the site and began the assembly of satellite dishes.
During August and September, 1983, Channel Master partially filled the Oxford lagoon with dirt, in order to provide badly needed parking and truck turn-around space. Approximately 50 to 80 percent of the lagoon was filled with about 8,000 cubic yards of fill dirt. This process was intended to, and did, push the sludges over to one side. The filled portion of the lagoon was thereafter used as a parking lot.
In 1984 Channel Master decided to move to a new plant location and to try to sell the Oxford Property. In connection with this decision, Channel Master renewed its efforts to make the lagoon space usable. It hired Soil & Material Engineers ("S & ME") to investigate the possibility of constructing a parking deck over the sludges. This idea was not pursued, and Channel Master then hired CMO Associates to investigate the possibility of eliminating the sludge in order to facilitate the sale of the property. CMO Associates recommended spreading the sludge which had been pushed into the remaining portion of the lagoon onto a 61 acre pine plantation. Testing by state officials had indicated that the sludge was not EPtoxic,4 and a land application permit was granted on March 29, 1985. However, in April 1985, before Channel Master could begin to remove the sludge, state officials revoked the land application permit on the grounds that the sludge was a listed hazardous waste.
Channel Master executives met with representatives of the North Carolina Solid and Hazardous Waste Management branch on May 2, 1985, to discuss said revocation and to review their options. Installation and sampling of groundwater monitoring wells, "delisting," and "closure" of the lagoon were discussed. Channel Master then had S & ME install four groundwater monitor wells near the lagoon in the fall of 1985. Chromium levels in excess of drinking water standards were found in one downgradient well. In addition, a deep well drilled through the filled portion of the lagoon detected some contamination of the groundwater by VOCs. Further testing indicated that the source of the VOCs contamination was near the main building on the side, in the area where JFD employees allegedly "continually dumped solvents on the ground."
In mid-1986, Channel Master received proposals from LAN Associates and S & ME to provide consulting assistance in selecting a remedy for the lagoon cleanup. These proposals were not accepted, and indeed, as discussed infra, Channel Master did not utilize the services of any consultant to advise it on the appropriate method of reviewing cleanup alternatives or selecting a remedy for the lagoon.
Channel Master attempted to contact EPA for assistance during the summer of 1986, but had some difficulty in obtaining the same. In late July 1986, a representative of Channel Master made the following request to Allen Antley, EPA Region IV's5 Chief of Waste Compliance:
I ask you to help Channel Master in establishing the proper parameters for cleaning up this site. We understand and accept the State of North Carolina's position on removing the sludge and contaminated soil and hauling it to an approved landfill. We further recommend removing the volatile contaminated earth, cleaning it and putting it back. Our problem is getting realistic "clean-to" parameters.
Channel Master provided additional information to EPA following a telephone conversation in August, 1986, but by October of that year, EPA still had not provided any real advice or direction, although it is undisputed that the agency was under no legal obligation to provide the same.6
In September 1986, S & ME performed sampling on the filled area of the lagoon. Sludge was found in an uneven pattern at depths no higher than 4 feet beneath the surface. The sludge was sampled and revealed readings of chrome, although S & ME stated that: "At this time it appears as if the underlying soil has not been contaminated by chromium leaching from the sludge...." Also in September 1986, S & ME took samples of soil to define the extent and area of VOC contamination. It furnished a report on its test results, but the report made no cleanup recommendations, nor did it discuss whether or what kind of risks were associated with the VOC contamination.
On October 16, 1986, Harold Mills, an operations manager at Channel Master, wrote the EPA to inform them that cleanup of the lagoon at Channel Master's Oxford facility would begin within 90 days. The plan he described for cleanup of the sludges is the same as that which Channel Master later implemented:
In November 1986, Channel Master hired Roger Coats, an engineer formerly employed by the North Carolina Solid and Hazardous Waste Management branch, to assist with the Oxford cleanup. Mr. Coats, working with Charles Hansen, the plant engineer in Channel Master's Smithfield facility, drafted a cleanup plan and submitted it to both state officials and to EPA. While putting the cleanup plan together, Mr. Coats and Mr. Hansen discussed numerous alternatives concerning the lagoon, including solidification, incineration and recycling of the sludge (these alternatives will be explained infra). It is undisputed that neither EPA nor state environmental officials were involved in this consideration of cleanup alternatives. Most of these alternative cleanup methods were rejected after what plaintiff readily concedes was "brief consideration."
Also in November 1986, Channel Master received the Phase I Groundwater Quality Evaluation Report from S &...
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