Chesapeake Bay Found. Inc. v. Severstal Sparrows Point Llc

Decision Date05 July 2011
Docket NumberCivil No. JFM–10–1861.
Citation794 F.Supp.2d 602
PartiesCHESAPEAKE BAY FOUNDATION, INC., et al., Plaintiffs,v.SEVERSTAL SPARROWS POINT, LLC, et al., Defendants.
CourtU.S. District Court — District of Massachusetts

OPINION TEXT STARTS HERE

Amy Elizabeth McDonnell, Jon Alan Mueller, The Chesapeake Bay Foundation Inc., Annapolis, MD, Ridgway M. Hall, Jr., Washington, DC, for Plaintiffs.Edward J. Longosz, II, Gabriella V. Cellarosi, Mark A. Johnston, Eckert Seamans Cherin and Mellott LLC, Amy L. Brown, Squire Sanders and Dempsey LLP, Washington, DC, David A. Rockman, Eckert Seamans Cherin and Mellott LLC, Pittsburgh, PA, Andrew Etter, Vincent Atriano, Squire Sanders and Dempsey LLP, Columbus, OH, Dale E. Papajcik, William Vere Shaklee, Squire Sanders and Dempsey LLP, Cleveland, OH, for Defendants.

OPINION

J. FREDERICK MOTZ, District Judge.

Plaintiffs, Chesapeake Bay Foundation, Inc. and Baltimore Water Harbor Keeper, Inc., are Section 501(c)(3) non-profit corporations dedicated to the protection and restoration of the Chesapeake Bay watershed and its tributaries and of the Baltimore Harbor and greater Patapsco River, respectively. Plaintiffs Joseph Anderson, Arthur and Tina Cox, Rebecca Kolberg, Wilton Strong, and Connie and Jerry Tomko, are individuals who live, recreate, and enjoy the waters surrounding the Sparrows Point Facility (“the Site” or “the Facility”), south of Baltimore, Maryland. Collectively, these non-profit corporations and individuals (hereinafter Plaintiffs) bring this action against Defendants, Severstal Sparrows Point LLC, a/k/a Severstal North America (Severstal) and ArcelorMittal USA Inc. (“ArcelorMittal”), for violations of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901, et seq. ; the Clean Water Act (“CWA”), 33 U.S.C. § 1251, et seq. ; the Maryland Erosion and Sediment Control Regulations, COMAR 26.17.01.01, et seq. ; and corresponding laws of Maryland relating to solid and hazardous waste management and water pollution control as set forth in the Environment Article of the Maryland Code. Plaintiffs seek declaratory and injunctive relief, penalties, and costs of litigation, including attorney fees and expert witness fees.

Now pending are ArcelorMittal and Severstal's Motions to Dismiss, pursuant to Federal Rules of Civil Procedure 12(b)(1), claiming a lack of subject matter jurisdiction, and Rule 12(b)(6), claiming that Plaintiffs have failed to state a claim against Defendants on which relief can be granted. For the following reasons, I grant ArcelorMittal and Severstal's Motions to Dismiss as to Counts I, III, IV, V, and VI, and I deny ArcelorMittal and Severstal's Motions to Dismiss as to Counts II and VII.

I. Factual Background

The Sparrows Point Facility is located on approximately 2,300 acres of land in Sparrows Point, Maryland. (Compl. ¶ 45.) The waters adjacent to the Facility are tidal tributaries to the Chesapeake Bay. ( Id.) The original owner of the Facility, Bethlehem Steel Corporation (“BSC”), owned the Site for 80 years, making iron and steel, as well as building and demolishing ships. ( Id. ¶ 46.)

A. Consent Decree

In the late 1990s, the Environmental Protection Agency (“EPA”) and Maryland Department of the Environment (“MDE”) brought an action against BSC for violations of RCRA, the CWA, and corresponding state law, which the parties settled by executing a Consent Decree, entered in this Court on October 8, 1997.1 (Compl. ¶¶ 52–53.) This Consent Decree was subject to public notice and comment before becoming final. See 62 Fed.Reg. 11917 (Mar. 13, 1997). The RCRA corrective action provisions of the Consent Decree provided that BSC was required to conduct a site-wide investigation to define the extent of hazardous wastes and constituents in the groundwater system, as well as identify, characterize, and determine the impact of the release of hazardous wastes and constituents to the air, groundwater, surface water, sediment, and soil throughout the Facility. (Severstal Mot. to Dismiss, Ex. 1 at 13–14.)

The Consent Decree also required BSC to implement “interim measures” and conduct a “corrective measures study.” ( Id., Ex. 1 at 9, 14.) Interim measures are required when EPA or MDE determine that a release from the facility poses a threat to human health or the environment that requires more immediate action than that which would follow from the development and implementation of a final remedy. (Severstal Mem. 6.) The corrective measures study is used to develop and evaluate corrective action alternatives for removal, containment, treatment, and/or remediation of the contamination and to recommend the corrective measures to be taken at the Facility. ( Id.)

The Consent Decree further imposes compliance requirements related to the two on-site landfills, Coke Point and Greys Landfills. ( See Severstal Mot. to Dismiss, Ex. 1 at 30.) These requirements relate to the types of waste the landfills may accept, as well as inspection requirements to ensure that only acceptable wastes are disposed in the landfills. ( Id., Ex. 1 at 30–34.) Additionally, the Consent Decree establishes compliance measures for the operation of the landfills, such as monitoring requirements and erosion controls. ( Id., Ex. 1 at 34–41.) A closure plan and post-closure plan are also required for each landfill. ( Id., Ex. 1 at 41–44.)

B. BSC Bankruptcy

Bethlehem Steel filed for Chapter 11 bankruptcy on October 15, 2001 in the Southern District of New York. (Severstal Mem. 7.) On March 12, 2003, BSC entered into an Asset Purchase Agreement (“APA”) with ISG Acquisition, Inc., and International Steel Group (collectively “ISG”) for ISG to purchase certain assets and assume certain liabilities from BSC, including the Sparrows Point Facility. ( See Severstal Mot. to Dismiss, Ex. 6.) On April 23, 2003, the Bankruptcy Court for the Southern District of New York entered a Bankruptcy Sale Order approving BSC's sale of the Facility pursuant to the terms of the APA. ( Id., Ex. 7.) The APA specifies the assumed and excluded liabilities and excludes liability for any environmental obligation relating to any property or asset other than the acquired assets; the Sparrows Point Facility is such an acquired asset. ( Id., Ex. 6) The Bankruptcy Order serves as confirmation, stating that ISG was not assuming successor liability except as provided in the APA. ( Id., Ex. 7.)

Mittal Steel merged with ISG on or about April 5, 2005, thus acquiring the Facility. (Compl. ¶ 11.) Mittal Steel then merged with Arcelor on or about June 26, 2006, creating ArcelorMittal. ( Id. ¶ 10.) The parties' dispute over the precise ownership of the Facility throughout these corporate transformations is discussed below.

II. Procedural Background

Prior to filing in federal court, Plaintiffs sent a Notice of Intent to Sue (“NOI”) letter to Defendants on May 29, 2010, as mandated by the CWA's citizen suit provision, 33 U.S.C. § 1365(b) (requiring that sixty days prior to the initiation of a civil action against any alleged violator, a citizen give notice of its intent to sue to the EPA Administrator, the State in which the violations are alleged to have occurred, and the alleged violator); RCRA's citizen suit provision, 42 U.S.C. § 6972(b)(2)(A) (requiring notice to the same parties ninety days prior to the initiation of a civil action); and the Maryland Code of Natural Resources § 1–505(b) (requiring that 30 days prior to the commencement of the action, a plaintiff must deliver written notice to the agency of the State responsible for initiating official action and on the Attorney General). ( See Compl. ¶ 6.) The NOI letter claimed that the “Potentially Responsible Parties have demonstrated “an ongoing and consistent pattern ... of failing to comply with the requirements of the Consent Decree,

[the Comprehensive

Environmental Response, Compensation, and Liability Act (“CERCLA”) ], [the Clean Air Act (“CAA”) ], CWA, RCRA, and Maryland law at the Sparrows Point facility.” (Severstal Mot. to Dismiss, Ex. 2)

Plaintiffs filed this action on July 9, 2010. Defendants filed Motions to Dismiss on September 19, 2010; Plaintiffs' opposition and Defendants' replies were filed in a timely manner. A motions hearing was held on March 11, 2011.

III. Statutory Background

RCRA is a comprehensive environmental statute that governs the treatment, storage, and disposal of solid and hazardous waste. See Chicago v. Envtl. Def. Fund, 511 U.S. 328, 331–32, 114 S.Ct. 1588, 128 L.Ed.2d 302 (1994). RCRA's primary purpose is to “reduce the generation of hazardous waste and to ensure the proper treatment, storage, and disposal of that waste which is nonetheless generated....” Meghrig v. KFC W., Inc., 516 U.S. 479, 483, 116 S.Ct. 1251, 134 L.Ed.2d 121 (1996). Citizens are permitted to bring private suits under RCRA in certain circumstances, but the “chief responsibility for the implementation and enforcement of RCRA rests with the Administrator of the Environmental Protection Agency.” Id. at 483–84, 116 S.Ct. 1251 (citing 42 U.S.C. § 6902(b)). Section 3006 of RCRA, 42 U.S.C. § 6926, allows the states to develop hazardous waste programs at least as stringent as RCRA, subject to authorization by the Administrator of the EPA. After receiving authorization, the state may implement its hazardous waste program “in lieu of the Federal program.” Section 3006(b) of RCRA, 42 U.S.C. § 6926(b). Maryland has received final authorization for its hazardous waste program. See 50 Fed.Reg. 3511 (Jan. 25, 1985) (as revised by 69 Fed.Reg. 44463 (July 26, 2004)).

Congress passed the CWA for the stated purpose of “restoring and maintaining the chemical, physical, and biological integrity of the Nation's waters.” 33 U.S.C. § 1251(a). “To serve those ends, the Act prohibits ‘the discharge of any pollutant by any person’ unless done in compliance with some provision of the Act.” S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95, 102, 124 S.Ct. 1537, 158 L.Ed.2d 264 (2004) (quotin...

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