Chesapeake and Potomac Tel. v. Peck Iron & Metal

• Decision Date: 24 December 1992
• Docket Number: Civ. A. No. 92-CV-506.
• Citation: 814 F. Supp. 1269
• Court: U.S. District Court — Eastern District of Virginia
• Parties: The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA, Plaintiff, v. PECK IRON & METAL CO., INC. et al., Defendants.

814 F. Supp. 1269

The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA, Plaintiff, v. PECK IRON & METAL CO., INC. et al., Defendants.

Civ. A. No. 92-CV-506.

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

December 24, 1992.

COPYRIGHT MATERIAL OMITTED

Richard Kent Bennett, Shawn Renea Urelius Jordanger, Betty Sinclaire Wommack, McSweeney, Burtch & Crump, Richmond, VA, for plaintiff.

Archibald Wallace, III, Sands, Anderson, Marks & Miller, Richmond, VA, for defendant Peanut City Iron & Metal, Inc.

Robert L. Harris, Jr., Hirschler, Fleischer, Weinberg, Cox & Allen, Richmond, VA, for defendant Goldsboro Iron & Metal Co.

A.J. Owings, Spinella, Owings & Shaia, Richmond, VA, for defendant Smith Iron & Metal Co., Inc.

John D. Epps, LeClair, Ryan, Joynes, Epps & Framme, Richmond, VA, for defendant Ramsey Iron & Metal, Inc.

W. Todd Benson, Press, Jones & Waechter, P.C., Richmond, VA, for defendant Phillip F. Gay, t/a Farmville Iron & Metal Co.

William Riley Marchant, Thorsen, Page & Marchant, Richmond, VA, for defendants Zacharias Bros., a Virginia General Partnership, Carol K. Zacharias, Edward A. Zacharias, Mary D. Zacharias, William K. Zacharias.

Susan Taylor Hansen, Cooper, Spong & Davis, Portsmouth, VA, for defendant Virginia Iron & Metal Co. of Portsmouth, Inc.

Joy J. Hatchette, Gordon, Feinblatt, Rothman, Hoffberger & Hollander, Baltimore, MD, for defendant Irving Hurwitz.

Madelaine Berg, Stroock, Stroock & Lavan, New York City, for defendant Peck Iron & Metal Co., Inc.

Winthrop A. Short, Jr., David Owens, Kaufman & Canoles, Norfolk, VA, for defendant Gutterman Iron & Metal Corp.

Patrick A. Genzler, Carter T. Gunn, Vandeventer, Black, Meredith & Martin, Norfolk, VA, for defendant Smith Iron & Metal Co., Inc.

MEMORANDUM OPINION

RICHARD L. WILLIAMS, Senior District Judge.

This matter is before the Court on: 1) the Plaintiff's Motion for Partial Summary Judgment on Joint and Several Liability; 2) the Zacharias Defendants' Cross-Motion for Summary Judgment; and 3) Defendant Phillip Gay's Motion for Summary Judgment. For the reasons set forth below, the Court grants the Plaintiff's motion and imposes joint and several liability upon the defendants to this motion, but only for those response costs not attributable to the Plaintiff. At the contribution phase of this proceeding, the Court will, as a first cut at apportioning liability, determine a "Plaintiff's share" and a "Defendants' share." The defendants will be jointly and severally liable for the Defendants' share only. Furthermore, the motions for summary judgment brought by Phillip Gay and the Zacharias Defendants are denied.

I. FACTS

A. C & R Battery Company

From 1971 until mid-1985, when it ceased operations, C & R Battery Company ("C & R Battery") operated a battery sawing and shredding facility designed to recover lead from discarded auto, truck and other large commercial batteries. C & R Battery leased the land on which it operated the business from Zacharias Brothers, a Virginia general partnership composed of Edward A. Zacharias and William K. Zacharias, during the period 1973 to mid-1985. C & R Battery also used a piece of land owned at one point by Zacharias Brothers and now owned by Edward A. Zacharias, William K. Zacharias, Mary D. Zacharias and Carol K. Zacharias.

C & R Battery purchased bulk shipments of spent lead acid batteries for recycling from the defendants to this motion,¹ as evidenced by a variety of documents, including receiving reports, statements, cancelled checks and other miscellaneous purchasing documents. According to the affidavit of Charles L. Guyton ("Guyton"), former president of C & R Battery, the batteries purchased from these defendants were shipped to the C & R Battery Site on Bellwood Road in Chesterfield County, Virginia, where they were broken in accordance with C & R Battery's normal operating procedure. The defendants, throughout the relevant time period — 1971 through mid-1985 — engaged in the scrap metal business. They purchased or acquired lead acid batteries, among other items, for purposes of resale and recycling. Typically, these defendants accumulated batteries until a commercially reasonable quantity existed to make a sale to a battery reclaimer like C & R Battery. After the batteries left their premises, the defendants had no further involvement in the recycling process.

As the batteries were broken, C & R Battery employees drained the lead acid into an acid pond, removed the lead plates and stored the plates on-site until they were sold to a secondary lead smelter. (Guyton Aff., paras. 3 and 7). Composite soil samples taken from the Site recently indicate that lead is present in the soil at the Site at levels of 40,000 mg/kg. (Affidavit of Jeffrey W. Moore, Project Engineer/Environmental for Geraghty & Miller "Moore Aff.", para. 10).

B. Regulatory Action at C & R Battery

The Virginia State Water Control Board ("SWCB") began monitoring the C & R Battery Site for lead contamination in the late 1970s, and continued conducting soil, ground-water and surface water tests through 1986. The results of the tests conducted by the SWCB showed elevated levels of lead in the soil. (Administrative Order at 7). In 1983, the Virginia Occupational Safety and Health Administration ("VA OSHA") inspected the site and determined that the breathing zone contained lead in concentrations well in excess of acceptable levels. (Id. at 8).

"On February 24, 1986, the Environmental Protection Agency's ("EPA") Field Investigation Team ("FIT") conducted a Site Investigation of local groundwater, surface water and soil contamination. On-site soil samples revealed levels of lead as high as 63,000 mg//kg." (Id.). In the summer of 1986, in response to health concerns, EPA conducted a removal action in which it verified that the soil was contaminated with elevated levels of lead and other metals. EPA then took actions to contain the contamination on the Site, including moving contaminated debris back onto the Site and installing a six-foot high chain-link fence around it. (Id. at 8-9). In August 1988, EPA began conducting a Remedial Investigation/Feasibility Study (RI/FS) for the Site. As a result of that study, EPA concluded that there were significant concentrations of lead on the Site at above-action levels. (Id. at 9-11).

On March 27, 1992, after a six-year investigation, EPA Region III issued an Administrative Order under 42 U.S.C. § 9606 requiring Plaintiff, C & P Telephone Company of Virginia ("C & P"), and 16 other potentially responsible parties, jointly and severally,² to assume responsibility for cleaning up the Site. Of the 17 recipients, only C & P eventually agreed to comply with the Order. C & P, of course, is far from an innocent and noble volunteer. Failure to comply with an Administrative Order issued pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") carries a penalty of up to $25,000 per day plus punitive damages. 42 U.S.C. §§ 9606(b)(1), 9607(c)(3). C & P sold a significant amount of batteries to C & R Battery, and appears to be one of the largest contributors to the Site.

C. Remedial Activities

As of April 28, 1992, C & P assumed sole responsibility for cleaning up the Site in accordance with the Administrative Order. By contract dated April 27, 1992, C & P hired Geraghty & Miller to serve as the Project Coordinator and Supervising Contractor for the remedial work to be done at the site. (Moore Aff., para. 4). EPA approved the selection of Geraghty & Miller to act as the Project Coordinator and Supervising Contractor by letter dated May 14, 1992.

After competitive bidding, and upon Geraghty & Miller's recommendation, C & P retained Laidlaw Environmental Services (FS), Inc. ("Laidlaw") to serve as the Remedial Action Contractor, a selection of which EPA also approved by letter dated August 24, 1992. Geraghty & Miller then assisted C & P in negotiating the parameters of Laidlaw's work, which allegedly conforms to the requirements of the Administrative Order and the specific requirements of the final design approved by EPA. (Moore Aff., para. 6). Geraghty & Miller is providing continuing oversight of the Laidlaw work at the Site to ensure compliance with the Administrative Order. To date, C & P has incurred $354,433.29 in remedial costs. (Moore Aff., para. 9).

D. Section 107 Action

On August 5, 1992, C & P filed a private cost recovery action under CERCLA, 42 U.S.C. § 9607(a), against 139 defendants (some of which have since been voluntarily dismissed) alleging that each defendant is jointly and severally liable to C & P for all response costs consistent with the National Contingency Plan (NCP) that it has and will incur in cleaning up the Site. C & P has moved the Court for partial summary judgment on the issue of joint and several liability against the facility owners and certain generator/recycler defendants. Defendants Zacharias Brothers, Edward A. Zacharias, William K. Zacharias, Mary D. Zacharias and Carol K. Zacharias (the "Zacharias Defendants") have filed a cross-motion for summary judgment against C & P, alleging an entitlement to the "innocent landowner" affirmative defense. Defendant Phillip Gay has filed a separate motion for summary judgment against C & P, contending that the recycling activities in which it engaged did not constitute "arranging for the disposal or treatment" of hazardous material and, thus, that it is not liable under CERCLA.

II. ISSUES PRESENTED

A. The generator/recycler defendants have claimed that they are not "covered persons" under CERCLA because they claim to have sold a valuable commodity — batteries — for recycling, as opposed to arranging for their disposal or treatment. Is this a meritorious defense?

B. The generator/recycler defendants have raised disputed issues of fact with respect to the "necessity" and "consistency with the NCP" of the response costs incurred by C & P. The...