City of Port Huron v. Amoco Oil Co., Inc.

• Decision Date: 19 May 1998
• Docket Number: No. 187422,187422
• Citation: 583 N.W.2d 215,229 Mich.App. 616
• Parties: CITY OF PORT HURON, Plaintiff-Appellee/Cross-Appellant, v. AMOCO OIL COMPANY, INC. and Grand Trunk Western Railroad, Defendants-Appellants/Cross-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 215

583 N.W.2d 215

229 Mich.App. 616

CITY OF PORT HURON, Plaintiff-Appellee/Cross-Appellant, v. AMOCO OIL COMPANY, INC. and Grand Trunk Western Railroad Defendants-Appellants/Cross-Appellees.

No. 187422.

Court of Appeals of Michigan.

Submitted Feb. 17, 1998, at Detroit.

Decided May 19, 1998, at 9:00 a.m.

Released for Publication Aug. 26, 1998.

Fletcher DeGrow (by Gary A. Fletcher and John D. Tomlinson), Port Huron, for the plaintiff.

Dykema Gossett, PLLC (by Joseph C. Basta, Kathleen McCree Lewis and Jeffrey S. Jones), Detroit, for Amoco Oil Company, Inc.

Bodman, Longley & Dahling, LLP (by R. Craig Hupp), Detroit, for Grand Trunk Western Railroad.

Before CORRIGAN, C.J. and JANSEN and WHITBECK, JJ.

PER CURIAM.

Following a bench trial, defendants appeal as of right from the judgment awarding plaintiff approximately $1.25 million in a private cost recovery action under the Michigan Environmental Response Act (MERA), M.C.L. § 299.601 et seq.; M.S.A. § 13.32(1) et seq., while plaintiff cross appeals the order denying its motion for attorney fees. ¹ We affirm.

I

On appeal, defendants first argue that the trial court erred in failing to rule that under the MERA, plaintiff could not recover the costs incurred in voluntarily remediating contamination on the property formerly owned by defendants (the Amoco site) unless plaintiff proved that it complied with the Michigan Department of Natural Resources (MDNR) rules governing the selection and implementation of remedial measures.

A

As recognized by this Court in Flanders Industries, Inc. v. Michigan, 203 Mich.App. 15, 20-21, 512 N.W.2d 328 (1993):

The MERA, 1982 P.A. 307, as amended by 1987 P.A. 166, 1989 P.A. 157, 1990 P.A. 233, and 1990 P.A. 234 (the so-called "polluters pay" law) is a complex statutory scheme intended, in the words of its title, "to provide for the identification ... of environmental contamination ... [and] to provide for response activity" at such sites. Under the MERA, persons may become liable for costs ("response activity costs") incurred by the Department of Natural Resources in removing pollution. M.C.L. § 299.612; M.S.A. § 13.32(12).

The MERA sets forth five categories of potentially responsible persons (PRPs). Farm Bureau Mut. Ins. Co. of Michigan v. Porter & Heckman, Inc., 220 Mich.App. 627, 639-640, 560 N.W.2d 367 (1996). Section 12(1) of the MERA, M.C.L. § 299.612(1); M.S.A. § 13.32(12)(1), provided in pertinent part:

Notwithstanding any other provision or rule of law and subject only to the defenses set forth in sections 12a and 12b, if there is a release or threatened release from a facility that causes the incurrence of response activity costs, the following persons shall be liable under his section:

(a) The owner or operator of the facility.

(b) The owner or operator of the facility at the time of disposal of a hazardous substance.

(c) The owner or operator of the facility since the time of disposal of a hazardous substance not included in subdivision (a) or (b).

(d) A person that by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of a hazardous substance owned or possessed by the person, by any other person, at the facility owned or operated by another person and containing the hazardous substance.

(e) A person that accepts or accepted any hazardous substance for transport to the facility selected by that person.

Before the 1990 amendments of the "polluters pay" law, the MERA authorized cost recovery actions only by the state. As amended in 1990, the MERA authorized persons other than the state (i.e., private parties) that voluntarily clean up contamination to recover their cleanup costs from PRPs provided that they comply with the provisions of § 12(2)(b). Section 12(2) provided:

A person described in subsection (1) shall be liable for:

(a) All costs of response activity lawfully incurred by the state relating to the selection and implementation of response activity under this act.

(b) Any other necessary costs of response activity incurred by any other person consistent with rules relating to the selection and implementation of response activity promulgated under this act.

(c) Damages for the full value of injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing the injury, destruction, or loss resulting from the release. [Emphasis provided.]

For the purposes of a cost recovery action under the MERA, a municipality is treated as a private party. Under § 3(s) of the MERA, M.C.L. § 299.603(s); M.S.A. § 13.32(3)(s), (and also the recodified sections in the NREPA, M.C.L. § 324.20101[x]; M.S.A. § 13A.20101[x] ), "[l]ocal unit of government" is defined as "a county, city, township, or village, an agency of a local unit of government, an authority or any other public body or entity created by or pursuant to state law. Local unit of government does not include the state or federal government or a state or federal agency." Because a municipality is treated as a private party for the purpose of cost recovery actions, plaintiff is thus treated as a private party whose claim falls under § 12(2)(b). ²

B

In this case, defendants argue that the trial court erred as a matter of law because the plain language of § 12(2)(b) requires that a private party seeking recovery of the cleanup costs from the owner or operator of the facility at the time of disposal of a hazardous substance establish that the private party incurred the costs of remediation consistent with the rules promulgated under the MERA, 1990 AACS, R 299.5101 et seq., effective July 12, 1990. ³ In interpreting § 12(2)(b), defendants claim that this Court should look to federal case law interpreting the analogous provision of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. § 9601 et seq., for guidance. ⁴ See Haworth, Inc. v. Wickes Mfg. Co., 210 Mich.App. 222, 228, 532 N.W.2d 903 (1995); Stolaruk Corp. v. Central Nat'l Ins. Co. of Omaha, 206 Mich.App. 444, 453, 522 N.W.2d 670 (1994). As defendants point out, the MERA is similar in intent to, and patterned after, the CERCLA, and both acts provide for the identification of environmental contamination and for response activity to remediate it. Flanders Industries, supra at 21, 512 N.W.2d 328. Further, both acts impose strict liability for cleanup costs on persons who fall within one of the enumerated categories of potentially responsible persons. M.C.L. § 299.612; M.S.A. § 13.32(12); 42 U.S.C. § 9607(a). See also 1 Michigan Environmental Law Deskbook, § 6.43, pp. 6-32--6-33; Nurad, Inc. v. William E Hooper & Sons Co., 966 F.2d 837, 841 (C.A.4, 1992); Kelley v. Thomas Solvent Co., 727 F.Supp. 1532, 1539 (W.D.Mich., 1989).

Under the CERCLA, private parties have a right to recover their cleanup costs from the parties responsible for the contamination provided that the response costs were necessary and were "consistent with the national contingency plan [NCP]." 42 U.S.C. § 9607(a)(4)(B); Artesian Water Co. v. New Castle Co., 659 F.Supp. 1269, 1278-1279 (D.Del., 1987), aff'd. 851 F.2d 643 (C.A.3 1988). Defendants argue that federal courts have uniformly interpreted § 9607(a) to require, "as a prerequisite to cost recovery, compliance with the NCP process for identifying and selecting remedial alternatives, i.e., the RI/FS [Remedial Investigation/Feasibility Studies] process." Channel Master Satellite Systems, Inc. v. JFD Electronics Corp., 748 F.Supp. 373 (E.D.N.C., 1990); Amland Properties Corp. v. Aluminum Co. of America, 711 F.Supp. 784 (D.N.J., 1989). Because the MERA is patterned after the CERCLA and has the same legislative objective, and because federal courts have generally held that consistency with the NCP is an element of the plaintiff's prima facie case on liability, ⁵ defendants maintain that the trial court erred in failing to rule that plaintiff could recover its response costs under § 12(2)(b) of the MERA only if it proved that the costs were incurred consistent with the MDNR rules for the selection and implementation of response activity. Because plaintiff did not establish that it performed a remedial investigation and a feasibility study consistent with the MDNR rules, defendants thus argue that plaintiff failed to establish a prima facie case showing that it was entitled to the recovery of its response activity costs.

C

At the outset, we begin with the observation that the interpretation of § 12(2)(b) presents an issue of first impression, because no Michigan appellate court has addressed this particular subsection in a published case. Statutory interpretation is a question of law that is reviewed de novo on appeal. Smeets v. Genesee Co. Clerk, 193 Mich.App. 628, 633, 484 N.W.2d 770 (1992). The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature. Farrington v. Total Petroleum, Inc., 442 Mich. 201, 212, 501 N.W.2d 76 (1993); Forest City Enterprises, Inc. v. Leemon Oil Co., 228 Mich.App. 57, 64, 577 N.W.2d 150 (1998). The first criterion in determining intent is the specific language of the statute. House Speaker v. State Administrative Bd., 441 Mich. 547, 567, 495 N.W.2d 539 (1993). If the plain and ordinary meaning of the language is clear, judicial construction is normally neither necessary nor permitted. Lorencz v. Ford Motor Co., 439 Mich. 370, 376, 483 N.W.2d 844 (1992); Heinz v. Chicago Rd. Investment Co., 216 Mich.App. 289, 295, 549 N.W.2d 47 (1996). However, if reasonable minds can differ regarding the meaning of a statute, judicial construction is appropriate. Id.

At first blush, § 12(2)(b) appears to have been anything but a model of clarity. The subsection provided, in pertinent part, that a PRP shall be liable to a private party for its "necessary costs of response activity incurred ... consistent with the...