Combined Prop./Greenbriar Partnership v. Morrow

• Citation: 58 F.Supp.2d 675
• Decision Date: 30 July 1999
• Docket Number: Civil Action No. 98-1584-A.
• Parties: COMBINED PROPERTIES/GREENBRIAR LIMITED PARTNERSHIP, Plaintiff, v. Dean E. MORROW, et al., Defendants. Dean E. Morrow, et al., Third-Party Plaintiffs, v. Aquiport Mid-Atlantic Retail, Inc., et al., Third-Party Defendants. J. Edward Glover and Puritan Systems, Inc./Progressive Cleaners, Third-Party Plaintiffs, v. Fairfax County, Virginia, Third-party Defendant.
• Court: U.S. District Court — Eastern District of Virginia

58 F.Supp.2d 675

COMBINED PROPERTIES/GREENBRIAR LIMITED PARTNERSHIP, Plaintiff, v. Dean E. MORROW, et al., Defendants.

Dean E. Morrow, et al., Third-Party Plaintiffs, v. Aquiport Mid-Atlantic Retail, Inc., et al., Third-Party Defendants.

J. Edward Glover and Puritan Systems, Inc./Progressive Cleaners, Third-Party Plaintiffs, v. Fairfax County, Virginia, Third-party Defendant.

Civil Action No. 98-1584-A.

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

July 30, 1999.

Robert E. Pokusa, Paul, Hastings, Janofsky & Walker, Washington, DC, for Combined Properties.

Kevin B. Bedell, Collier, Shannon, Rill & Scott, PLLC, Washington, DC, for Marilyn R. Morrow, Morrow Corporation.

William L. Stauffer, McLean, VA, for Greenbrier-50 LP.

Benjamin G. Chew, Washington, DC, for Puritan Systems, Inc./Progressive Cleaners.

MEMORANDUM OPINION

BRINKEMA, District Judge.

Before the Court is third-party defendants/third-party plaintiffs J. Edward Glover's and Puritan Systems, Inc./Progressive Cleaners' Motion for Summary Judgment. Because we find that the issues are ready for decision and oral argument would not further the decisional process, we will decide this motion on the pleadings.

BACKGROUND

Plaintiff, Combined Properties/Greenbriar Limited Partnership (Greenbriar LP) originally brought this CERCLA action against defendants, Dean E. Morrow, Marilyn R. Morrow, and the Morrow Corporation (collectively, Morrow). Morrow then brought a third-party complaint against several other parties, including J. Edward Glover and Puritan Systems, Inc./Progressive Cleaners (Glover and Puritan Systems are referred to collectively as Puritan).

Greenbriar LP is the owner of Greenbriar Town Center, a shopping center in Fairfax, VA. In this action, Greenbriar LP seeks injunctive relief and damages for the costs of remedying the contamination by hazardous materials allegedly resulting from waste disposal in the operation of a dry cleaning business (the Business) located at Store No. 8 (the Property) at Greenbriar Town Center. From 1969 until 1992, three different entities ran dry cleaning business at the Property. These were Puritan,¹ from 1969-1974; Greenbriar Cleaners from 1974-1986; and Morrow, from 1986-1992. Greenbriar LP alleges that these owners all operated a "plant on premises" dry cleaning business within the shopping center in which they used certain chemicals, including perchloroethylene (PCE), a toxic and hazardous substance. Greenbriar LP further alleges that the owners permitted the PCE to contaminate the soil and groundwater and that Greenbriar LP has borne and will continue to bear the costs of investigating and characterizing the type and extent of the contamination, as well as of remediation. It is estimated that the total cost of cleanup will be approximately $ 1 million. Greenbriar LP brings this action under section 7002 of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C.A. § 6972(a)(1)(B) (1995), and under sections 107 and 113 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C.A. §§ 9607(a)(2) and 9613(f) (1995), as well as under common law causes of action.

Puritan's summary judgment motion raises a pure question of law and, for the purposes of this motion only, Puritan has agreed to assume certain facts as true. Specifically, Puritan, which ran the Business under the name Progressive, assumes that it satisfies the requirements for CERCLA liability, in that it used PCE in its business and disposed of some forms of waste containing at least small amounts of PCE, while it was in business. The parties agree that Puritan sold the Business in 1974, six years before CERCLA's effective date, and that Puritan's waste disposal practices were legal at the time.

The single question of law raised in Puritan's motion is whether the Supreme Court's recent decision in Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998), requires a finding that CERCLA cannot be retroactively applied to Puritan. The parties agree that before Eastern Enterprises, the law was clear in all circuits that the retroactive liability imposed by CERCLA was constitutional. See, e.g., United States v. Monsanto, 858 F.2d 160 (4th Cir.1988). Puritan argues that courts must now reconsider this view of retroactivity in light of Eastern Enterprises. Plaintiffs and third-party plaintiffs disagree, arguing that Eastern Enterprises is limited to its facts and that Monsanto has never been overruled or superseded.

DISCUSSION

I. The Law Regarding Retroactive Liability Under CERCLA

A. Fourth Circuit Law Before Eastern Enterprises

The Fourth Circuit first addressed the retroactivity of CERCLA in United States v. Monsanto, 858 F.2d 160 (4th Cir.1988). In that case, between 1976 and 1980, a South Carolina waste-handling business had been disposing toxic waste on a four-acre site it had leased for that purpose. The business disposal was done in a very haphazard manner, allowing toxic chemicals to leak from "rusted, rotted, and otherwise deteriorated" drums, permitting incompatible chemicals to commingle, and creating "noxious fumes, fires, and explosions." Id. at 164. The United States filed suit against the business under RCRA. The government later amended its complaint to include a CERCLA count after that statute became effective.

In Monsanto, the Fourth Circuit determined that CERCLA is a retroactive liability statute, in that it creates joint and several liability for all parties "that played a role in creating the hazardous conditions," even if they played that role before CERCLA became effective. Id. at 174. The Fourth Circuit explicitly found that the system Congress created in CERCLA is a logical one, given the often indivisible nature of conditions creating an environmental hazard. Therefore, there was no violation of due process in imposing liability against the waste-handling business, even though the methods by which it disposed of the toxic materials were technically legal at the time. See id. ("[R]etroactive application of CERCLA does not violate due process"; finding that the consequences of this rule are not "`particularly harsh and oppressive'") (citation omitted). The Fourth Circuit noted that all other courts to have examined this issue had reached the same conclusion, i.e., that retroactive liability under CERCLA satisfies constitutional scrutiny. See id. at 174 (stating that other courts had "held uniformly that retroactive operation [of CERCLA] survives the Supreme Court's tests for due process validity"). Four years later, the Fourth Circuit further explained the nature of CERCLA liability, holding that "[t]he trigger to liability under [42 U.S.C.] § 9607(a)(2) is ownership or operation of a facility at the time of disposal, not culpability or responsibility for the contamination." Nurad, Inc. v. William E. Hooper & Sons Co., 966 F.2d 837, 846 (4th Cir.1992).

B. Eastern Enterprises

In 1998, the Supreme Court addressed the retroactivity of the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act), 26 U.S.C. §§ 9701-9722 (1994). See Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 2149, 141 L.Ed.2d 451 (1998). The Court struck down the Coal Act, with a plurality of four justices finding that it violated the Takings Clause of the Fifth Amendment of the Constitution. Justice Kennedy disagreed with the plurality's reasoning, finding that the Coal Act did not violate the Takings Clause, but concurred in the judgment, concluding that the Act did violate the Due Process Clause. To understand the degree to which the Court's holding is or is not applicable to the instant action, it is necessary to review the extensive factual background of the litigation.

After a tumultuous period of labor disputes, highlighted by President Truman's decision to nationalize the coal industry in 1946, the coal operators and the United Mine Workers of America (UMWA) entered into labor agreements in 1947 and 1950 that created a multi-employer trust to provide pension and medical benefits to miners and their families. The trust was funded by payment of a royalty of 30 cents per ton of coal produced by signatory operators on a several, rather than a joint, basis. The original agreement did not guarantee lifetime benefits for miners and stated that benefits could be adjusted in the future. Although minor changes were made annually to the 1950 agreement, the next major revision came in 1974, when changes were required to bring the trust program into compliance with the Employee Retirement Income Security Act (ERISA). The 1974 agreement dramatically expanded benefits to cover retirees until their death and their widows until death or remarriage. However, in spite of this expansion, there was no consequent alteration to the employers' obligation to contribute to the trust. This eventually led to funding problems, causing large numbers of employers to drop out of the benefit plans. This, in turn, placed tremendous pressure on the remaining employers and led to large deficits in the trust account. In 1992, Congress attempted to address these problems by passing the Coal Act, which merged the 1950 and 1974 benefit plans into a single, multi-employer plan (the Combined Fund). The Combined Fund was to provide the same health benefits to retirees that they had received as workers under the 1950 and 1974 plans. The Act provided that these benefits would be financed by annual premiums against any coal operator who had both signed any agreement requiring contributions to either the 1950 or 1974 plans, and who still "conducts or derives revenue from any business activity, whether or not in the coal industry." Under the Act, a statutory formula was used to assign retired miners to specific operators and former operators. The operators and former operators were then required to pay the premiums for the retirees assigned to them.

Eastern Enterprises was a coal...