Dixon Lumber Co. v. Austinville Limestone Co.
| Decision Date | 31 March 2019 |
| Docket Number | Civil Action No. 7:16-cv-00130 |
| Citation | 386 F.Supp.3d 688 |
| Parties | DIXON LUMBER COMPANY, INC., Plaintiff, v. AUSTINVILLE LIMESTONE COMPANY, INC., Defendant. |
| Court | U.S. District Court — Western District of Virginia |
Jane E. Fedder, Pro Hac Vice, Polsinelli PC, St. Louis, MO, Robert Francis Redmond, Jr., McGuireWoods LLP, Richmond, VA, for Plaintiff.
Harrison Mann Gates, James Edward Moore, Shannon Marie Fitzgerald, Christian & Barton, LLP, Richmond, VA, for Defendant.
In this case, plaintiff/counter-defendant Dixon Lumber Company, Inc. (Dixon) and defendant/counter-claimant Austinville Limestone Company, Inc. (ALC),1 seek cost recovery, contribution, and declaratory relief under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. The overarching issue before the court is who should be held financially responsible for environmental remediation and reclamation of Austin Meadows, a portion of real property located in Wythe County, Virginia, and owned by Dixon.
The case was tried with the court sitting as finder of fact over the course of three days. Prior to trial, the parties submitted their proposed findings of fact and conclusions of law. (Dkt. Nos. 174, 175.) The trial evidence included a significant number of exhibits, as well as testimony and exhibits from depositions, many of which were not read into the record at trial, but instead submitted after the trial for the court to review. Additionally, the parties submitted their closing arguments in writing after the trial. (Dkt. Nos. 195, 196.)
Based on the trial evidence, including the deposition testimony, the court issues this memorandum opinion, which constitutes its findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).
This case is fact-intensive, and the parties' arguments are heavily fact-dependent. As a result, this opinion devotes a number of pages to the court's factual findings. But without the broader context of the parties' positions, the importance of certain facts—and a reader unfamiliar with the case—likely will be lost. Accordingly, the court begins with an over-simplified sketch of the relevant events and an overview of the parties' positions, and then continues to its findings of fact.
The parties are owners of adjoining properties in Wythe County, Virginia. In 1992, there was a discharge of pollutants from the mine tailings pile on a portion of Dixon's property known as "Austin Meadows" into a nearby stream. In response, in 1993, the parties entered into an agreement whereby ALC (who is in the mining business) agreed to remove the mine tailings from Austin Meadows, and, pursuant to a separate consent order that Dixon entered into with Virginia's Department of Environmental Quality (DEQ), the land eventually would be restored to a condition acceptable to DEQ. Virginia's Department of Mines, Minerals and Energy (DMME), which issued ALC a permit to mine the tailings at Austin Meadows, also required reclamation of that portion of Austin Meadows that ALC was mining after its mining operations were completed. Among other disputes, the parties disagree about the effect and interrelation of various agreements between the parties and a critical 1993 preliminary engineering review (PER) that was prepared by ALC and submitted to environmental agencies.
ALC's removal of the mine tailings proceeded far more slowly than anyone had anticipated, although the parties dispute both the reasons for that slower pace and whether ALC was contractually obligated to complete removal at all, let alone in the five-year time frame set forth in the PER. Nonetheless, for a number of years, the two companies worked mostly cooperatively with each other and with the environmental agencies exercising oversight over the project at Austin Meadows. Over the years, the parties entered into subsequent (but largely identical) agreements, and Dixon and DEQ entered into subsequent consent orders, mostly to extend the time for completing removal of the tailings.
In June 2013, another important event occurred that is relevant to the parties' claims and the remediation of the property.2 After a significant rainfall, a long-existing pipe and dam, which were supposed to ensure that a stream known as Jackson Branch went around the tailings pile, failed. This failure caused water to flow over the tailings and resulted in discharges of pollutants into streams and the nearby New River, into which both Jackson Branch and Buddle Branch (another stream near the tailings pile) flowed. These discharges resulted in public complaints and sparked a renewed interest in the site by both DEQ and DMME. Thereafter, Dixon, ALC, DEQ, and DMME entered into a Letter Agreement and agreed to take certain actions to stop the discharges and prevent future discharges. This resulted in additional remediation costs, some of which related to work on the Jackson Branch pipe and dam (the Jackson Branch Costs). In the course of negotiating the specific manner in which the land should be remediated, however, significant disputes arose between the parties about who should be responsible for which costs. The relationship soured, and this lawsuit resulted.
Under CERCLA, each party seeks to recover from the other certain costs related to the remediation of the property. ALC's counterclaim also includes state law claims for breach of contract and quantum meruit. Each party suggests that the entirety (or nearly the entirety) of the CERCLA response costs should be borne by the other.
Dixon contends that response costs, and especially those related to that Jackson Branch June 2013 discharge, are ALC's responsibility. Dixon claims that the parties' initial agreement and the PER provided that Dixon would be responsible only for reseeding the land after ALC completed all other reclamation, including removal of pipes as they were uncovered. With regard to the Jackson Branch discharge, Dixon argues that ALC should have removed the tailings completely from the site long before that ever occurred, rather than keeping stockpiles of them onsite for customers to pick up from Austin Meadows without implementing precautions to prevent them being moved by water and wind. Dixon also contends that ALC repeatedly dragged its feet and failed to abide by the terms of the PER and the parties' initial contract to accomplish a timely removal. Had ALC timely removed the tailings and taken them offsite, Dixon contends, then the tailings would not have been on the property and pollutants from the tailings would not have made their way into the water.
On the Jackson Branch issue, ALC counters that the pipe and dam failed because of Dixon's negligent failure to maintain them and that Dixon knew as of at least 2011 that the pipe and dam needed repairing. But in any event, ALC contends it is not responsible for the Jackson Branch Costs, both because ALC was not an operator in the area where the pipe and dam failed (which was outside its mining permit boundaries) and because the steps taken in response were all steps that were Dixon's responsibility under the original consent order and the parties' agreements.
One provision of CERCLA, 42 U.S.C. § 9607, subjects to liability "the owner and operator of a ... facility," 9607(a)(1), and also subjects to liability "any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of," 9607(a)(2), for "(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe 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; (C) damages for injury to, destruction of, or loss of natural resources ..." 9607(a)(4). "To establish a prima facie case of liability under CERCLA, a plaintiff must allege that: (1) release of hazardous substances has occurred, (2) at a ‘facility,’ as defined by the statute, (3) that caused the plaintiff to incur response costs, and (4) that the defendants are ‘responsible parties,’ again, as defined by the statute and interpretive caselaw." United States v. High Point Chem., Corp. , 7 F.Supp.2d 770, 774 (W.D. Va. 1998). "Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a)," and "[i]n resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate." 42 U.S.C. § 9613(f)(1).
Importantly, a number of both factual and legal matters relevant to the CERCLA claims were agreed upon prior to trial. Those agreements were memorialized by the court in its November 22, 2017 Order (Dkt. No. 171), and the court adopts them as part of its findings of fact and conclusions of law. Specifically, the parties agree that:
This leaves four primary issues...
To continue reading
Request your trial
-
United States v. Godley
...preclude private parties from allocating risks amongst themselves for environmental liability. See Dixon Lumber Co. v. Austinville Limestone Co. , 386 F. Supp. 3d 688, 712–13 (W.D. Va. 2019). In fact, CERCLA specifically permits it: "Nothing in this subsection shall bar any agreement to ins......
-
United States v. Godley
...Rather, any party who may be liable under CERCLA remains liable, with the indemnitor then becoming ultimately responsible for the costs. Id. Courts will “enforce a contract that allocates suffered by imposition of CERCLA liability ‘where the provisions evince a clear and unmistakable intent......
- United States v. Lipscomb