Chatham Steel Corp. v. Brown

• Decision Date: 19 July 1994
• Docket Number: Civ. A. No. 93-50064/LAC.
• Citation: 858 F. Supp. 1130
• Parties: CHATHAM STEEL CORPORATION, et al., Plaintiffs, v. C. BROWN and Mandy Sapp, et al., Defendants.
• Court: U.S. District Court — Northern District of Florida

858 F. Supp. 1130

CHATHAM STEEL CORPORATION, et al., Plaintiffs, v. C. BROWN and Mandy Sapp, et al., Defendants.

Civ. A. No. 93-50064/LAC.

United States District Court, N.D. Florida.

July 19, 1994.

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Phillip A. Bates, Pensacola, FL, Robert N. Steinwurtzel, Washington, DC, for plaintiffs.

American Iron & Metal Co., Inc., William Melnick, Registered Agent, Atlanta, GA, Michael W. Kehoe, Fuller, Johnson & Farrell, Pensacola, FL, Karen Aldridge Crawford, Nelson Mullins Riley & Scarborough, Columbia, SC, Bob W. Pittman, Jr., James C. Pittman, Jr., Montague & Pittman, Hattiesburg, MS, Michael D. Smith, Wilson, Harrell & Smith, Pensacola, FL, Sidney F. Ansbacher, Brant, Moore, Sapp, MacDonald & Wells, Jacksonville, FL, Gilbert Keith Murphy, Moultrie, GA, Dan A. Aldridge, Jr., Atlanta, GA, Alan Rhodey, Pensacola, FL, Mark Upton, Richardson, Daniel, Spear & Upton, Mobile, AL, Clifford W. Sanborn, Barron, Redding, Hughes, Fite, Bassett & Fensom, Panama City, FL, Louie M. Bishop, Waynesboro, MS, Tim E. Sleeth, Herschel T. Vinyard, Jr., Smith, Hulsey & Busey, Jacksonville, FL, John W. Fleming, Pensacola, FL, George Ward Hendon, E. Thomison Holman, Adams Hendon Carson Crow & Saenger, P.A., Asheville, NC, Norton Bond, Pensacola, FL, Bert Moore, Moore, Kessler & Moore, Niceville, FL, W. Thomas Howard, Registered Agent, DeMark, Inc., Knoxville, TN, Stephen B. Shell, Shell, Fleming, Davis & Menge, Pensacola, FL, George Miles Stark, Posey Distributing Co., Inc., Tampa, FL, Robert A. Anderson, Tampa, FL, Robert E. Clute, Jr., Mobile, AL, Arthur Baron, Orlando, FL, William N. Asma, Asma & Wright, P.A., Winter Garden, FL, Bradford W. Wyche, Wyche, Burgess, Freeman & Parham, P.A., Greenville, SC, Charles Wynn, Marianna, FL, Carl Gibson, Sr., Fountain Inn, SC, Bennie Hickman, Gulfport Scrap, Biloxi, MS, K. Olin Miller, Atlanta, GA, J.M. Warren, Athens, GA, Keith Begin, St. Petersburg, FL, William F. Cowley, Mobile, AL, Karl R. Steinberger, Colingo, Williams, Heidelberg, Steinberger & McElhaney, Pascagoula, MS, Kenneth Hosford, Tallahassee, FL, William Lamb, Theodore, AL, Ruth Lamb, Esto, FL, for defendants.

ORDER ON SUMMARY JUDGMENT ON THE ISSUE OF LIABILITY

COLLIER, District Judge.

Plaintiffs seek recovery under § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) for costs they have incurred and will continue to incur in cleaning up the "Sapp Battery" Superfund Site near Cottondale, Florida. Plaintiffs Chatham Steel, Dixie Rubber & Metal and Jackson Iron & Metal are among a group of fifty-seven companies who signed a consent decree with the United States obligating them to conduct and finance the clean up of contaminated soil at the Site. Defendants in this action are a group of companies and individuals identified by the United States and Plaintiffs as potentially responsible parties (PRP's) under CERCLA. Plaintiffs have moved for summary judgment against 36 defendants on the issue of liability under § 107. A number of these defendants have, in turn, filed cross-motions for summary judgment.

The defendants answering this motion have raised several common arguments against liability under § 107. In particular, Defendants claim they did not "arrange for" the disposal or treatment of hazardous substances as defined in § 107(a)(3) of CERCLA. This order will first address these common defenses by reciting the uncontested facts relevant to all defendants and analyzing the legal issues regarding "arranger" liability under § 107(a)(3). Several defendants have also raised defenses unique to their circumstances. The facts and analysis relevant to these defendants will be set out in part II of this order.

Factual Background

In 1970, Sapp Battery Salvage Service, Inc. began recycling spent lead-acid batteries at its 53-acre site near Cottondale, Florida. The company, initially owned and operated by C. Brown Sapp, purchased spent batteries, cut them open with an antique hay baler, and recovered the lead to sell to lead smelters. During this process, acid from the batteries spilled on the ground and flowed uncontrolled across the Site. Meanwhile, the company dumped the cut battery casings — contaminated with lead — in the northern portion of the Site. In the beginning, the company processed between 600 and 800 batteries a week at the Site.

Sometime in 1973, C. Brown Sapp's son, Jerry Sapp, began taking over the business from his father. Jerry Sapp disposed of the casings and acid in much the same fashion as his father. By that time, however, the business had grown to where it employed approximately twenty-five truck drivers who travelled throughout the southeastern United States collecting spent batteries. Three years later, in 1976, the company was processing approximately 5,000 batteries a week at the Site. In 1978, Jerry Sapp finished acquiring from his father the land on which the Site is located. That same year, Jerry Sapp incorporated the business as "Sapp Battery Services, Inc."

By 1979, the company reached the peak of its operations. At the time, the company was cutting around 5,000 batteries a day and purchasing batteries through brokers as well as directly from businesses. The company continued to drain large quantities of battery acid directly into a swamp on the Site. Meanwhile, plastic casings were shredded and buried throughout the property. Beginning in spring 1978, Sapp's disposal methods began drawing the attention of the Florida Department of Environmental Regulation after neighbors complained of acidic runoff from the Site.

The defendants in this motion are companies who sold batteries to Sapp between 1978 and 1980. When purchasing batteries, Sapp typically initiated the purchase by calling sellers to inquire whether they had any batteries to sell. If a seller had a load of batteries to sell and the parties could agree on a price, Sapp sent one of its trucks to the seller's business to pick up the batteries. At pick up, the batteries would be weighed and Sapp's truck driver would pay for the load with a check or cash. Sapp paid for the batteries by the pound, and the price was determined by the price of lead on the secondary metals market. Once the batteries were loaded and paid for, the seller retained no interest in the batteries and had no control over Sapp's operation.

Though Sapp purchased batteries directly from battery shops and scrap yards, it also purchased batteries through battery brokers like Blattner Metals of Jacksonville. A number of companies who sold batteries through brokers are defendants in this suit and in this motion. When Sapp bought batteries from brokers, it paid the broker for the batteries. Sapp, however, collected the batteries directly from the businesses providing the batteries to the broker. When picking up batteries, whether at companies who sold directly to Sapp or through a broker, Sapp drivers always identified themselves to the sellers. Likewise, Sapp's trucks bore the company's name in plain view.

In January 1980, Jerry Sapp abruptly shut down the company and effectively walked away from the Site. Thereafter, the Environmental Protection Agency (EPA) became involved and in 1982 the Site was placed on the National Priorities List. After a decade of study and clean up, the EPA issued a Unilateral Administrative Order pursuant to § 106 of CERCLA requiring the recipients of the order, including many of the plaintiffs and defendants in this action, to cleanup the Site. In 1993, Plaintiffs, along with fifty-four other PRP's, entered into a consent decree with the United States governing the cleanup. Under the terms of the consent decree, these PRP's agreed to repay the United States for costs it incurred at the site as well as conduct the remaining cleanup. After entering into this agreement, Plaintiffs contacted the PRP's who had not entered into the consent decree and asked them to join them in financing the cleanup operations. None accepted this offer, and Plaintiffs in turn filed this action against the non-settling PRP's. The current motion for summary judgment is directed against 32 of those defendants.¹

Discussion

A motion for summary judgment should be granted when "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to summary judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Everett v. Napper, 833 F.2d 1507, 1510 (11th Cir.1987). An issue of fact is "genuine" if the record as a whole could lead a rational trier of fact to find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue is "material" if it might affect the outcome of the case under the governing law. Id. On a motion for summary judgment, the Court must take the evidence in a light most favorable to the non-moving party. Griesel v. Hamlin, 963 F.2d 338, 341 (11th Cir.1992).

To establish a claim under § 107(a) of CERCLA, a plaintiff must prove:

1. the site in question is a "facility" as defined in § 101(9) of CERCLA;

2. a release or threatened release of a hazardous substance has occurred;

3. the release or threatened release has caused the plaintiff to incur response costs; and

4. the defendant is a responsible party under § 107(a) of CERCLA.

Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146, 1150 (1st Cir. 1989); Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152-53 (9th Cir.1989); Chesapeake & Potomac Tel. Co. v. Peck Iron & Metal Co., 814 F.Supp. 1269, 1274 (E.D.Va. 1992). Here, it is uncontested Plaintiffs have established the first three elements of their § 107 claim. The Sapp Battery Site qualifies as a "facility" under CERCLA, see...