Cottman Ave. PRP Grp. v. Amec Foster Wheeler Envtl. Infrastructure Inc.

• Decision Date: 13 February 2020
• Docket Number: CIVIL ACTION No. 16-6613
• Citation: 439 F.Supp.3d 407
• Parties: COTTMAN AVENUE PRP GROUP, et al., Plaintiffs, v. AMEC FOSTER WHEELER ENVIRONMENTAL INFRASTRUCTURE INC., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

439 F.Supp.3d 407

COTTMAN AVENUE PRP GROUP, et al., Plaintiffs,

v.AMEC FOSTER WHEELER ENVIRONMENTAL INFRASTRUCTURE INC., Defendant.

CIVIL ACTION No. 16-6613

United States District Court, E.D. Pennsylvania.

Filed February 13, 2020

Daniel Hentschel, Hunton Andrews Kurth LLP, Miami, FL, Dawn Getty Sutphin, Prospect Park, PA, Jeffrey Noble Martin, Michael S. Levine, Hunton Andrews Kurth LLP, Washington, DC, Dan J. Jordanger, Hunton & Williams, Richmond, VA, for Plaintiff.

Cory P. Taylor, Richard J. Davies, Milber Makris Plousadis & Seiden, LLP, Berwyn, PA, for Defendant.

MEMORANDUM OPINION

Goldberg, District Judge

Plaintiffs, a group of utility companies,¹ have sued Defendant AMEC Foster Wheeler Environmental Inc. ("AMEC"), under Section 113 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9613 ("CERCLA") and for Pennsylvania common law breach of contract and breach of warranty. Plaintiffs allege that AMEC improperly designed a sheet pile wall needed to prevent PCB-contaminated soils from entering the Delaware River. AMEC seeks summary judgment as to all claims brought by Plaintiffs and, in turn, Plaintiffs seek summary judgment on their breach of contract claims and their entitlement to litigation costs and fees. For the following reasons, both Motions for Summary Judgment will be granted in part and denied in part.

I. STATEMENT OF FACTS

A. General Background

From approximately 1968 until 1973, the Metal Bank of America, Inc. ("Metal Bank"), conducted transformer salvage operations at the Metal Bank Cottman Avenue National Priorities List Site (the "Site"), at 730 Milner Street in Philadelphia, Pennsylvania. (DSUF ¶ 1.)² Various utility companies, including Plaintiffs, sold their used and discarded transformers and capacitors to Metal Bank, and oil containing PCBs and other contaminants were released into the environment during the salvage process. (DSUF ¶ 2.)

Between 1980 and 2006, the United States pursued judicial remedies against the owners and operators of the Site for (a) reimbursement of cleanup costs and (b) injunctive relief for further remedial work. (PSUF ¶ 4; DC ¶ 4.) In September 1983, the U.S. Environmental Protection Agency ("EPA") placed the Site on the Superfund National Priorities List. (PSUF ¶ 5; DC ¶ 5.) In 1997, the EPA issued a Record of Decision ("ROD") that set forth the EPA's preferred remedy for the contamination at the Site. (PSUF ¶ 7; DC ¶ 7.) The ROD called for, in part:

Installation of an oil collection system consisting of a sheet pile wall around the southern and western perimeter of the property; interceptor trenches with oil-water separators and sump pumps, or similar collection devices, inside the wall to prevent oil from migrating to the Delaware River; discharge of collected groundwater to the Delaware River in accordance with the National Pollution Discharge Elimination System requirements; and off-site disposal of collected oil in accordance with the [Resource Conservation and Recovery Act] and [Toxic Substances Control Act].

(Compl., Ex. 1, at 1–2.) The ROD went on to specify that prior to excavation of soil from the southern portion of the property, "a sheet pile wall shall be installed around the southern and western perimeter of the property adjacent to the Delaware River to prevent erosion of fill materials into the river and facilitate installation of the oil collection system." (Id. at 54.) Any collected oil was to be disposed of off-site in accordance with Pennsylvania Residual Waste Management regulations. (Id. )

In 1998, the EPA issued an administrative order ("Administrative Order" or "AO") requiring Plaintiffs, consisting of eight members of the "potentially responsible persons" group ("Plaintiffs" or "PRP Group"), to prepare a design for the remedial action in accordance with the ROD. (PSUF ¶ 12; DSUF ¶ 4.) The PRP Group issued a request for proposal ("RFP") to consulting firms for performance of the remedial design under the AO. The RFP contained the Technical Scope of Work Requirements for the Site, including "[p]lacement of a sheet pile wall with oil/water separators to prevent any remaining PCBs from migrating to the Delaware River through either surface erosion or groundwater." (Compl., Ex. 2 ¶ 2.1.) Those requirements also provided that the oil collection system, consisting in part of the sheet pile wall, was to be "installed at the Site in accordance with the ROD." (Id. ¶ 2.3.)

B. The 1998 Contract

In July 1998, Ogden Energy and Environmental Services ("Ogden")—the predecessor-in-interest to Defendant AMEC—along with its "team partner" Hart Crowser, Inc., submitted a proposal to the PRP Group. (PSUF ¶ 15; DC ¶ 15.) Ogden represented that it had "an intimate knowledge of the requirements of implementing this design project," based on its "review of the ROD, Administrative Order and the Scope of Work." (PSUF ¶ 16; DC ¶ 16.) Ogden's proposal further stated that it understood the design project to require "[p]lacement of a sheet pile wall with oil/water separators to prevent any remaining PCBs from migrating to the Delaware River through either surface erosion or groundwater." (PSUF ¶ 17; DC ¶ 17.) The design work for the "Interceptor Trench" was to "include [a] sheet pile cutoff wall, or if determined to be practical and feasible, an HDPE [high-density polyethylene] curtain, interceptor trench or horizontal well system, sumps, pumps, controls, LNAPL [light non-aqueous phase liquid] collection tank and building." (PSUF ¶ 18; DC ¶ 18.)

In 1998, Ogden entered into a contract with the PRP Group to serve as the environmental engineering firm that would prepare the remedial design under the EPA order (the "1998 Contract"). (PSUF ¶ 19; DC ¶ 19.) The contract required Ogden to "perform the Scope of Services ... as set forth in Attachment C to the RFP and the Design Contractor's proposal, as amended." (PSUF ¶ 20; DC ¶ 20.) Ogden warranted that it was "experienced, properly qualified, registered, equipped, organized and financed to perform Services under this Agreement, is engaged in the business of hazardous substance investigation and cleanup, and has developed the requisite experience for investigation and cleanup of such substances." (PSUF ¶ 22; DC ¶ 22.) Ogden further stated that it would "conduct its activities in a safe and professional manner and in compliance with EPA's Administrative Order and all applicable statutes, ordinances, orders, rules and regulations of the federal, state and local governments in whose jurisdiction such activities are performed." (PSUF ¶ 24; DC ¶ 24.) Ogden warranted its services to be "free from defects due to materials, workmanship and/or design" and agreed that if any of its services failed to conform to the professional responsibility standard, it would, "at its expense, perform corrective Services of the type originally performed as may be required to correct any such defective services of which" it was notified in writing by the PRP Group. (PSUF ¶¶ 26–27; DC ¶¶ 26–27.) In addition, it agreed to "defend, indemnify and hold harmless PRP Group from and against any and all claims, losses, damages, liability, costs or actions, including, without limitation, reasonable attorney fees and other costs and expenses ... arising out of, resulting from or in connection with any unlawful, negligent or willful misconduct or omission" by Ogden or its employees or subcontractors. (PSUF ¶ 28; DC ¶ 28.) To guarantee its obligations, Ogden agreed to secure and maintain insurance policies to cover its work. (PSUF ¶¶ 29–30; DC ¶¶ 29–30.)

The 1998 Contract provided the following with respect to the disposal of waste materials:

Unless otherwise specified, [Ogden] will act as the PRP's agent in overseeing the proper handling, initial storage at the site, sampling, and final disposal of waste materials such as drill cuttings, soil and water samples, and well development and pumping test water that may be generated during the performance of the Services. PRP Group shall hold Design Contractor harmless from and against any allegation that Design Contractor is the owner or operator of the site, or owned, possessed or arranged for the transportation, treatment or disposal of any material with respect to which services are provided hereunder, so long as Design Contractor obtains PRP Group's prior consent with respect to the arrangements for transportation, treatment or disposal of the material at issue.

(PSUF, Ex. 3, ¶ 18.)

Ogden's team partner, Hart Crowser, worked on the design of the sheet pile wall from the beginning of the project under the AO in 1998 until early 2002. (PC, Ex. 39.) In February 2002, Hart Crowser retained Ocean & Coastal Consultants to complete the design of the wall. (Id. )

The actual construction work on the sheet pile wall was subcontracted by Hart Crowser to AMEC Earth and Environmental, Inc. ("AMEC EE"). (DSUF ¶ 6.) Ogden and AMEC EE performed the remedial design work set forth in the 1998 Contract during the time period between 1998 and 2002. (PSUF ¶ 35; DC ¶ 35.) In the interim, in 2000, AMEC EE purchased the assets and assumed certain liabilities of Ogden Energy and Environmental Services ("Ogden"). (PSUF ¶ 2; DC ¶ 2.) Defendant AMEC Foster Wheeler Environmental & Infrastructure, Inc. ("AMEC") is the surviving division of AMEC Earth and Environmental, Inc. ("AMEC EE") following a 2013 merger. (PSUF ¶ 1; DC ¶ 1.)

The remedial design work by Ogden included the collection of data and engineering analyses addressing the various elements of the ROD remedy, including the sheet pile wall. (PSUF ¶ 37; DC ¶ 37.) One of Ogden's deliverables under the AO and the 1998 Contract was a Pre-Design Investigation ("PDI") Report that documented certain conditions at the Site, including the presence of hazardous substances at the Site and geotechnical data relevant to the Interceptor Trench remedial design component. (PSUF ¶ 38; DC ¶ 38.) In September 2002, AMEC, having assumed Ogden's responsibilities and...