Dico, Inc. v. Amoco Oil Co.

• Decision Date: 14 August 2003
• Docket Number: No. 02-2989.,02-2989.
• Citation: Dico, Inc. v. Amoco Oil Co., 340 F.3d 525 (8th Cir. 2003)
• Parties: DICO, INC., Plaintiff-Appellant, v. AMOCO OIL COMPANY, Chevron Chemical Company; Monsanto Company; Shell Oil Company; Bayer Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

340 F.3d 525

DICO, INC., Plaintiff-Appellant, v. AMOCO OIL COMPANY, Chevron Chemical Company; Monsanto Company; Shell Oil Company; Bayer Corporation, Defendants-Appellees.

No. 02-2989.

United States Court of Appeals, Eighth Circuit.

Submitted: January 13, 2003.

Filed: August 14, 2003.

COPYRIGHT MATERIAL OMITTED

John R. Muth, argued, Grand Rapids, MI (S. Grace Davis, Kurt A. Kissling, on the brief), for appellant.

Nancy Saunders, argued, Los Angeles, CA (Tiffany R. Hedgpeth, Edward W. Remsburg, Daniel E. Vineyard, on the brief), for appellee.

Before BOWMAN, RICHARD S. ARNOLD and BYE, Circuit Judges.

BYE, Circuit Judge.

Dico, Inc., appeals the district court's¹ grant of summary judgment dismissing its direct cost recovery action under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601-9675.

Dico was compelled by the Environmental Protection Agency (EPA), pursuant to Unilateral Administrative Orders (UAO), to clean up contamination located on property it owned in Des Moines, Iowa. After incurring approximately $5.7 million in cleanup costs, Dico brought suit against Shell Oil Company, BP Products North America, Inc., Monsanto Company, Chevron Chemical Company, and Bayer Corporation (collectively "Customer Group") seeking direct recovery of those costs and any future costs or alternatively, seeking pro rata contribution. The district court dismissed Dico's direct cost recovery action holding that Dico, as a potentially responsible party (PRP), was limited to seeking contribution from the Customer Group. The district court also dismissed Dico's action for contribution because the Customer Group had entered into a judicially-approved consent degree with the EPA which included a grant of protection from other PRPs who might seek contribution. Dico appeals the district court's dismissal and we affirm.

I

In 1974, trichloroethylene (TCE) was detected in water coming from underground wells located near property owned by Dico and maintained by the Des Moines Water Works. The EPA designated the area the "Des Moines TCE Site" and placed it on the national priority list. The Des Moines TCE Site was divided into several "operable units." Operable Unit-2 ("OU-2") and Operable Unit-4 ("OU-4") (together "OU-2/4") were within Dico's property. Each was contaminated with TCE, and OU-4 was also contaminated with herbicides and pesticides.

Dico's corporate predecessor, Di-Chem, had operated a chemical formulation business on the Dico property until the 1970s. In 1994, the EPA issued two UAOs and Dico conducted two removal actions at OU-2/4. The Customer Group conducted a third removal action pursuant to an Administrative Order on Consent (AOC). The EPA also incurred costs associated with the removal actions at OU-2/4.

In 1996, the EPA signed a Record of Decision (ROD), confirming completion of the three removal actions at OU-2/4. The Customer Group requested settlement negotiations with the government regarding the costs associated with the cleanup efforts. Pursuant to CERCLA, 42 U.S.C. § 9622(e)(3), the EPA undertook a nonbinding preliminary allocation of responsibility (NBAR) and allocated 61% of the responsibility to Dico and 39% to the Customer Group collectively. In April 1998, the EPA formally notified the Customer Group and Dico they were PRPs and provided each with copies of the NBAR and a proposed consent decree. Dico and the Customer Group were further notified that settlement with the government would provide protection from liability in the contribution action brought by Dico arising out of the same remediations.² Despite repeated invitations from the government, Dico did not respond and chose not to participate in settlement negotiations. On November 2, 1998, on the eve of reaching an agreement with the Customer Group, the government reminded Dico that a final consent decree would include contribution liability protection for the Customer Group. Dico remained steadfast in its refusal to participate in the negotiations.

On November 29, 1999, the government filed an action in district court and simultaneously lodged the proposed consent decree. As required by CERCLA, 42 U.S.C. § 9622(d)(2), the consent decree was published in the Federal Register; in response to which Dico submitted objections and comments. Dico moved to intervene in the action and to consolidate it with this cost recovery/contribution action. The district court granted Dico's motion to intervene but deferred ruling on Dico's motion to consolidate the two actions.

On March 10, 2000, the government moved to enter the consent decree. Dico requested an evidentiary hearing arguing 1) a hearing was necessary because the government failed to provide a fair and complete record, and 2) Dico had a vested property interest in the contribution action which under the Fifth Amendment could not be "taken" without due process, i.e., an evidentiary hearing.

The district court denied Dico's request for an evidentiary hearing because Dico had been provided sufficient opportunity to supplement the record before and after the action was filed in district court. The district court also rejected Dico's due process challenge, holding Dico never had a right to contribution because its statutory contribution claim was at all times limited by 42 U.S.C. § 9613(f)(2) ("A person who has resolved its liability to the United States ... in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement."). The district court then granted the government's motion to enter the consent decree, and denied as moot Dico's motion to consolidate the contribution action with the action at bar. We affirmed the district court's decision on appeal. United States v. BP Amoco Oil PLC, 277 F.3d 1012, 1020 (8th Cir.2002).

Thereafter, the Customer Group moved for summary judgment in this action arguing 1) CERCLA § 107(a)(1) and (a)(4)(B) barred Dico's direct action for cost recovery because Dico was a PRP, and 2) Dico's action for contribution was barred by the consent decree entered into between the Customer Group and the government. The district court granted the Customer Group's motion for summary judgment and this appeal followed. Originally, Dico appealed the dismissal of both causes of action but has subsequently abandoned its appeal of the dismissal of the contribution claim. Thus, the only issue before us is whether the district court properly dismissed Dico's direct cost recovery action.

II

This court reviews a grant of summary judgment de novo, applying the same standard as the district court. Jaurequi v. Carter Mfg. Co., Inc., 173 F.3d 1076, 1085 (8th Cir.1999). Rule 56(c) of the Federal Rules of Civil Procedure provides summary judgment shall be awarded to a party if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. When ruling on a summary judgment motion, a court must view the evidence "in the light most favorable to the nonmoving party." Dush v. Appleton Elec. Co., 124 F.3d 957, 962-63 (8th Cir.1997). However, a "nonmovant must present more than a scintilla of evidence and must advance specific facts to create a genuine issue of material fact for trial." F.D.I.C. v. Bell, 106 F.3d 258, 263 (8th Cir.1997). For a non-moving party to defeat summary judgment, the alleged factual dispute must be "material to an essential element of the specific theory of recovery at issue." Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir.1992)).

The Customer Group argues Dico's direct cost recovery action is barred because Dico is a PRP as defined by CERCLA, and CERCLA limits actions between PRPs to those for contribution. Dico argues CERCLA does not prohibit direct cost recovery actions between PRPs.

"CERCLA is a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites." Key Tronic Corp. v. United States, 511 U.S. 809, 814, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994). "Congress enacted CERCLA to facilitate the cleanup of hazardous waste sites, and to shift the costs of environmental response from taxpayers to the parties who benefitted from the use or disposal of the hazardous substances." Aviall Servs., Inc. v. Cooper Indus., Inc., 263 F.3d 134, 136-37 (5th Cir.2001) (citing OHM Remediation Serv. v. Evans Cooperage Co., Inc., 116 F.3d 1574, 1578 (5th Cir.1997)). CERCLA § 107(a)(1)-(4), 42 U.S.C. § 9607(a)(1)-(4), defines the parties responsible for cleanup costs (PRPs) as:

1. [T]he owner or operator of ... [the] facility,

2. Any person who at the time of disposal of any hazardous substance owned or operated ... [the] facility...,

3. Any person who ... arranged for disposal or treatment of ... hazardous substances ... at the facility..., and

4. Any person who accepts ... hazardous substances for transport to [the facility for disposal or treatment].

CERCLA § 107(a)(4)(A) and (B) makes PRPs liable for:

(A) all costs of removal or remedial action incurred by the United States Government ... not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan[.]

Parties incurring cleanup costs pursuant to an order from the EPA, who believe they are not responsible for the contamination, may bring a claim in federal court to recover their cleanup costs. United States v. Dico, Inc., 136 F.3d 572, 574 (8th Cir.1998). The statute provides two avenues for recovery. First, § 107 allows the government or an "innocent" private party to recover cleanup costs from PRPs through a direct cost recovery action. See 42 U.S.C. § 9607(a)(4) (stating PRPs "shall be liable for ... (A) all costs of removal or remedial action incurred by the United States Government ... [and] (B) any other necessary costs...