CPC Intern., Inc. v. Aerojet-General Corp.
| Decision Date | 06 March 1991 |
| Docket Number | 1:89-CV-961.,No. 1:89-CV-503,1:89-CV-503 |
| Citation | 759 F. Supp. 1269 |
| Parties | CPC INTERNATIONAL, INC., Plaintiff, v. AEROJET-GENERAL CORPORATION, Cordova Chemical Company, Cordova Chemical Company of Michigan, and Michigan Department of Natural Resources, Defendants. UNITED STATES of America, Plaintiff, v. CORDOVA CHEMICAL COMPANY OF MICHIGAN, Cordova Chemical Company of California, Aerojet-General Corporation, CPC International, Inc., and Dr. Arnold C. Ott, Defendants. |
| Court | U.S. District Court — Western District of Michigan |
COPYRIGHT MATERIAL OMITTED
Patrick J. Conlon, Roseland, N.J., J. Michael Smith, Gordon J. Quist, Miller, Johnson, Snell & Cummiskey, Grand Rapids, Mich., Randy M. Mott, Raissa Kirk, Robert T. Lee, Stephen E. Williams, Mott, Williams & Lee, P.C., Washington, D.C., William S. Wells, CPC Intern., Inc., Englewood Cliffs, N.J., David L. Harris, Robert Chesler, Alexander Kovacs, Lowenstein, Sandler, Kohl, Fisher & Boylan, Roseland, N.J., for CPC Intern., Inc.
John D. Tully, Warner, Norcross & Judd, Grand Rapids, Mich., for Aerojet-General Corp., Cordova Chemical Co. and Cordova Chemical Co. of Michigan.
Stewart H. Freeman, Asst. Atty. Gen., Frank J. Kelley, Atty. Gen., Environmental Protection Div., Kathleen L. Cavanaugh, Eric J. Eggan, Asst. Attys. Gen., Lansing, Mich., for Michigan Dept. of Natural Resources.
Michael L. Shiparski, Thomas J. Gezon, Asst. U.S. Attys., John A. Smietanka, U.S. Atty., Grand Rapids, Mich., Michael J. McNulty, Richard B. Stewart, U.S. Dept. of Justice, Environment & Natural Resources Div., Environmental Enforcement Section, Washington, D.C., Nicholas Bollo, Assoc. Reg. Counsel, Larry L. Johnson, Anne L. Alonzo, U.S. E.P.A., Region V, Chicago, Ill., John Fogarty, U.S. E.P.A., Enforcement & Compliance Monitoring Office, Gregory L. Sukys, U.S. Dept. of Justice, Environmental Enforcement Section, Environment and Natural Resources Div., Washington, D.C., for the U.S Charles M. Denton, Theresa M. Pouley, Jon F. DeWitt, Varnum, Riddering, Schmidt & Howlett, Grand Rapids, Mich., for Dr. Arnold C. Ott.
Carole D. Bos, Kevin J. O'Dowd, Buchanan & Bos, Grand Rapids, Mich., Richard A. Fogel, William M. Savino, M. Paul Gorfinkel, Rivkin, Radler, Bayh, Hart & Kremer, Uniondale, N.Y., for Commercial Union Ins. Co.
Stanley A. Prokop, Plunkett & Cooney, P.C., Detroit, Mich., for Home Ins. Co.
Timothy F. Casey, Kohl, Secrest, Wardle, Lynch, Clark & Hampton, Farmington Hills, Mich., for Insurance Co. of State of Pennsylvania.
Peter B. Kupelian, Kirsten Kingdon, Tucker & Rolf, Southfield, Mich., Robert J. Bates, Jr., Phelan, Pope & John, Ltd., Chicago, Ill. for Zurich Ins. Co.
Lynn L. Lower, Kallas, Lower, Henk & Treado, Bloomfield Hills, Mich., for Affiliated FM Ins. Co.
Grant J. Gruel, Scott R. Melton, Gruel, Mills, Nims & Pylman, Grand Rapids, Mich., Irene A. Sullivan, Timothy G. Reynolds, Skadden, Arps, Slate, Meagher & Flom, New York City, for North Star Reinsurance Corp.
Reynolds A. Brander, Jr., Cholette, Perkins & Buchanan, Grand Rapids, Mich., for Intern. Ins. Co.
Randall E. Phillips, Marilyn A. Madorsky, Provizer, Lichtenstein, Pearlman & Phillips, P.C., Southfield, Mich., Sheldon Karasik, Peter M. Papasavas, Sheft & Sweeney, New York City, for Highlands Ins. Co.
Harrison C. Stackpole, Holahan, Malloy, Maybaugh & Monnich, Troy, Mich., for Mission Ins. Co.
Charles W. Browning, Vandeveer Garzia, P.C., Detroit, Mich., for Prudential Reinsurance Co. and Aetna Cas. and Sur. Co.
Gary A. Maximiuk, Wheeler, Upham, Bryant & Uhl, Grand Rapids, Mich., for Newington, Ltd.
James R. Nelson, Nelson & Kreuger, P.C., Carole D. Bos, Kevin J. O'Dowd, Grand Rapids, Mich., Richard A. Fogel, William M. Savino, M. Paul Gorfinkel, Rivkin, Radler, Bayh, Hart & Kremer, Uniondale, N.Y., for Fireman's Fund Ins. Co.
William F. Jerome, State of New York Ins. Dept., New York City, for Allianz Versicherungs-AG and Midland Ins. Co.
Joel S. Huyser, Robert J. Dugan, Rhoades, McKee, Boer, Goodrich & Titta, Grand Rapids, Mich., Eileen B. Eglin, Stephen D. Straus, Wilson, Elser, Moskowitz, Edelman & Dicker, New York City, for Northwestern Nat. Ins. Co.
Charles N. Dewey, Jr., Dilley, Dewey & Damon, P.C., Grand Rapids, Mich., Paul R. Koepff, Mudge, Rose, Guthrie, Alexander & Ferdon, New York City, for Insurance Co. of North America.
This consolidated action is brought under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. (1988). The parties filed a total of eight summary judgment motions regarding liability under CERCLA for the cleanup costs at a now-dormant chemical plant in Dalton Township, Michigan ("the site"), which is on the Superfund list of hazardous waste sites that are a national priority. At the conclusion of a hearing on February 4, 1991, the court delivered a bench opinion denying all or part of five motions for summary judgment. The remaining motions or parts of motions are decided in this opinion.
For nearly 30 years beginning in 1957, a series of companies used the site to produce a variety of chemicals. Since 1981, the federal Environmental Protection Agency ("EPA") has investigated how to remedy serious contamination problems that developed in the ground and water at the site and in surrounding areas due to hazardous waste disposal practices. In 1989, EPA selected the first phase of its remedial program for the site, and the claims in this consolidated action seek to determine who should be liable for the past and future costs of this cleanup.
The parties involved in this action are the United States; Arnold C. Ott ("Ott"); CPC International, Inc. ("CPC"); Aerojet-General Corp. ("Aerojet") and two wholly-owned subsidiaries, Cordova Chemical Co. ("Cordova/California") and Cordova Chemical Co. of Michigan ("Cordova/Michigan"); and the Michigan Department of Natural Resources ("MDNR").
The court, in the February 4 bench opinion, held that genuine issues of material fact exist regarding the liability of Ott, CPC, Aerojet, Cordova/California, and MDNR under CERCLA provisions which, under certain circumstances, hold liable current and past owners or operators of sites polluted by hazardous wastes. See 42 U.S.C. § 9607(a)(1), (2).
The liability issues raised in the motions presently before the court arise under a separate theory of CERCLA liability and a different set of facts. The central question, raised in claims brought by CPC, is whether MDNR, Aerojet and Cordova/California are liable under section 107(a)(3) of CERCLA, which extends liability to those who arrange for disposal or treatment of hazardous substances. 42 U.S.C. § 9607(a)(3). In addition, there are related legal issues under CERCLA provisions dealing with the validity of releases and under pendent state claims.
The factual scenario that raises the questions before the court began at the site in the mid-1970s. Story Chemical Co., which had purchased the site in 1972, became mired in economic problems and engaged in poor environmental practices. Chief among Story's environmental abuses was abandonment of a groundwater purging system, which caused the spread of hazardous substances further below the surface and beyond the site.
Serious contamination problems had developed at the site by this time, and MDNR became involved in having Story redress them in 1976 or 1977. In June 1976, however, Story filed for bankruptcy. Thereafter, Story's compliance with MDNR's orders with respect to improved environmental practices at the site was, at most, incomplete and unsatisfactory. Story, which is not a party to this action, was adjudicated bankrupt in August 1977.
MDNR became involved in efforts to find a new buyer for the site. The widespread contamination at the site was a major issue in this pursuit. After at least one unsuccessful attempt at a deal with a company for the site, Aerojet and its Cordova Chemical Co. division (the unincorporated predecessor to Cordova/California) entered the picture. In March 1977, officials from Aerojet and its Cordova division met with MDNR officials in Michigan. After the meeting, the company initially elected not to acquire the property, due, in part, to its pollution problems.
Later in 1977, however, there was renewed interest in the site by Aerojet and its Cordova division as a possible facility for manufacture of a chemical that would soon not be available from a previous supplier. Talks between officials from MDNR and Aerojet and its Cordova division resumed.
The existing and spreading contamination at the site was central to the negotiations that began in the summer of 1977. The negotiations culminated in an October 13, 1977, stipulation and consent order signed by MDNR, Michigan's attorney general's office and Cordova Chemical Co. which had become separately incorporated (i.e., Cordova/California) on October 3, 1977. It should be noted that, although the document is entitled "stipulation and consent order," the parties were not involved in litigation, and no court approval of hazardous waste disposal practices was contemplated. On the day after the stipulation and consent order was signed, Cordova/California purchased the site from Story's bankruptcy trustee.
The four-page stipulation and consent order between MDNR and Cordova/California identified four central pollution problems emanating from the site: groundwater contamination, buried waste sludge, toxic waste drums and containers, and contaminated residential wells. With respect to the groundwater problems, the stipulation stated that:
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