Elementis Chemicals v. T H Agriculture and Nutrit.
| Decision Date | 31 January 2005 |
| Docket Number | No. 03 Civ. 5150(LBS).,03 Civ. 5150(LBS). |
| Citation | 373 F.Supp.2d 257 |
| Parties | ELEMENTIS CHEMICALS INC., Plaintiff, v. T H AGRICULTURE AND NUTRITION, L.L.C., and Philips Electronics North America Corporation, Defendants. Phillips Electronics North America Corporation, Counterclaim Plaintiff, v. Elementis Chemicals Inc., Counterclaim Defendant. T H Agriculture and Nutrition, L.L.C., Counterclaim Plaintiff, v. Elementis Chemicals Inc., Counterclaim Defendant. Phillips Electronics North America Corporation, Third Party Plaintiff, v. Elementis PLC and Elementis Holdings Ltd., Third Party Defendants. T H Agriculture and Nutrition L.L.C., Third Party Plaintiff, v. Elementis PLC and Elementis Holdings Ltd., Third Party Defendants. |
| Court | U.S. District Court — Southern District of New York |
Weil, Gotshal & Manges, L.L.P., Konrad L. Cailteux, New York City, for Plaintiff and Third Party Defendants.
Weil, Gotshal & Manges, L.L.P., David R. Berz, David B. Hird, Kristin King Brown, Daniel W. Hurson, Washington, DC, for Plaintiff and Third Party Defendants.
Elementis America, Inc., as counsel for Elementis Chemicals Inc., John Stevens Barnett, Hightstown, NJ, for Plaintiff and Third Party Defendants.
Spencer Fane Britt & Browne LLP, James T. Price, Michael D. Hockley, Kansas City, MO, for Defendant / Third Party Plaintiff T H Agriculture and Nutrition, L.L.C.
Schnader Harrison Segal & Lewis LLP, Peter C. Langenus, Richard J. Pelliccio, New York City, for Defendant / Third Party Plaintiff T H Agriculture and Nutrition, L.L.C.
Mayer, Brown, Rowe & Maw LLP, John C. Berghoff, Jr., Michael P. Rissman, Chicago, IL, for Defendant / Third Party Plaintiff Phillips Electronics North America Corporation.
Mayer, Brown, Rowe & Maw LLP, Thomas M. Mueller, Stefan W. Engelhardt, New York City, for Defendant / Third Party Plaintiff Phillips Electronics North America Corporation.
In the instant action, plaintiff Elementis Chernicals, Inc. ("Plaintiff" or "ECI") brings suit under the Comprehensive Environmental Response Compensation and Liability Act of 1980 ("CERCLA"), and under various state-law theories, against defendants T H Agriculture and Nutrition L.L.C. ("THAN") and Phillips Electronics North America Corporation ("PENAC") (collectively referred to as "Defendants"). The matter is before the Court on the parties' cross-motions for summary judgment. For the reasons stated below, Defendants' motion for summary judgment as to Plaintiff's CERCLA claims is granted, Plaintiff's cross-motion for summary judgment as to those CERCLA claims is denied, and the Court declines to exercise supplemental jurisdiction over the state-law claims that remain.
This case stems from a 1981 sale of various chemical manufacturing and distribution facilities.1 Included in that sale were fourteen facilities particularly relevant here (the "Facilities"), located in Bessemer, Alabama; Dallas, Texas; Davenport, Iowa; Denver, Colorado; Houston Texas; Indianapolis, Indiana; Kansas City, Kansas; New Orleans, Louisiana; Oklahoma City, Oklahoma; Powder Springs, Georgia; San Antonio, Texas; St. Paul, Minnesota; Tampa, Florida, and Wichita, Kansas.2 The sale was consummated on June 12, 1981 pursuant to an Asset Purchase Agreement ("APA"), dated May 11, 1981, among Harrisons & Crosfield, Ltd., an English company; H & C Acquisition, Inc., a Delaware subsidiary of Harrisons & Crosfield, Ltd., North American Phillips Corporation ("NAP"); and Thompson-Hayward Chemical Company, a then-wholly-owned subsidiary of NAP.3 The parties refer to Thompson-Hayward Chemical Company in its pre-May-1981 form as "Old Thompson-Hayward."
Pursuant to the APA, H & C Acquisition purchased, from NAP and Old Thompson-Hayward, the assets that made up the Industrial Chemical Division, Textile Maintenance Division, and Pest Control Operators Division of Old Thompson-Hayward. H & C Acquisition later changed its name to Thompson-Hayward (referred to as "New Thompson-Hayward"), then changed its name to Harcros Chemicals, Inc., and eventually became Elementis Chemicals, Inc., the plaintiff in this action. NAP later became PENAC, one of the defendants in this action. Old Thompson-Hayward subsequently became THAN, the other defendant in this action. THAN is a Delaware limited liability company, the principal member of which is PENAC.
Various chemicals that constitute "hazardous substances" under CERCLA, see 42 U.S.C. § 9601(14), were used by Old Thompson-Hayward at some or all of the facilities ultimately acquired by ECI. In its complaint in the instant action, filed in July of 2003, ECI alleges that it has incurred costs in response to contamination resulting from Old Thompson-Hayward's activities with respect to those chemicals, and that pursuant to CERCLA it has a right to recover those costs from THAN as to all fourteen Facilities and from PENAC as to the New Orleans facility. ECI also alleges that Defendants have breached certain indemnification provisions of the APA regarding preexisting environmental liabilities, as a remedy for which ECI requests both damages and a declaration of its contract rights. ECI further alleges that it is entitled to recovery from THAN under the Indiana Environmental Legal Action statute ("Indiana ELA"), Indiana Code § 13-30-9-2, for costs it has incurred to remedy contamination at the Indianapolis facility that occurred when THAN's predecessor owned that facility. Finally, ECI alleges that it is entitled to an allocation of costs pursuant to a settlement agreement it reached with THAN and PENAC regarding allocation of payments made to the City of Wichita under a separate agreement settling the possible CERCLA claims of that City.
THAN and PENAC counterclaim against ECI, each asserting the same four counterclaims. In addition to a counterclaim under CERCLA, THAN and PENAC assert that ECI is liable to them under common-law theories of quantum meruit, unjust enrichment, and contribution; that ECI is liable to them under a Davenport Interim Agreement (officially titled "Interim Cost Sharing Agreement, Davenport, Iowa Facility") entered into in December 1998 by PENAC, THAN, Elementis plc, and Harcros Chemicals, Inc. (now ECI); and that ECI is liable to them under a "Kansas City final allocation agreement" (officially titled "Former Process Building Final Allocation Agreement, 5200 Speaker Road") entered into by PENAC, THAN, Elementis plc, and Harcros Chemicals, Inc. (now ECI).
THAN and PENAC have also brought third-party complaints against Elementis Holdings, Ltd. ("LTD") and Elementis plc ("PLC"). To understand these third-party complaints, it is helpful to note the various names under which those entities were previously known, and the relationship in which they stand to the Plaintiff in the main action. LTD has formerly been known as Harrisons & Crosfield Ltd., Harrisons & Crosfield plc, Elementis plc, and, it asserts, Elementis Holdings plc. PLC is alleged to be a successor to Harrisons & Crosfield plc, and acknowledges that it is "the ultimate corporate parent of ... ECI" (PLC Ans. to THAN Compl. ¶ 4). According to Plaintiff's Rule 7.1(a) disclosure statement, ECI is wholly owned by Elementis America Inc., a Delaware corporation, which in turn is wholly owned by LTD, which in turn is wholly owned by Elementis Group BV, a Dutch company, which in turn is a wholly owned subsidiary of PLC.
The third-party complaints by THAN and PENAC assert claims under the same common-law theories and contracts based upon which THAN and PENAC counterclaim against ECI — that is, quantum meruit, unjust enrichment, and contribution, the Davenport Interim Agreement and the Kansas City final allocation agreement — as well as under four other contracts. THAN and PENAC bring contract claims against LTD and PLC based upon two interim agreements allegedly entered into in 1987 and 1988 among Harrisons & Crosfield, Ltd., Thompson-Hayward Chemical Company (now ECI), NAP (now PENAC), and T H Agriculture & Nutrition Company, Inc. (described in the third-party complaints as the predecessor to THAN), relating to the New Orleans facility: the 1988 agreement allegedly "provides in part that Elementis Holdings Ltd., Elementis plc, and ECI shall reimburse THAN and PENAC within ten days of receipt of invoices" for certain costs (THAN 3P Compl. ¶ 30; PENAC 3P Compl. ¶ 30). THAN and PENAC also bring contract claims against LTD and PLC based upon a 1993 Indianapolis Interim Agreement among Harcros Chemicals Inc. (now ECI), NAP (now PENAC), and T H Agriculture and Nutrition Company, Inc. (allegedly predecessor to THAN), asserting entitlement to damages and a declaratory judgment. Finally, THAN and PENAC bring contract claims against LTD based upon a November 2000 Wichita Interim Agreement (officially titled the "Interim Cost Sharing Agreement, Wichita Facility") entered into among THAN, PENAC, Elementis Holdings, Ltd., and Harcros Chemicals, Inc. (now ECI) — the same settlement agreement based upon which ECI pursues one of its initial claims.
Third-party defendants LTD and PLC, in turn, counterclaim against defendant/third-party-plaintiff THAN, although not against PENAC. They assert that THAN is liable to them under CERCLA for costs incurred in responding to contamination that had been present at the Facilities prior to the closing of the APA.
Taking full advantage of the permission granted by Rule 56 of the Federal Rules of Civil Procedure to seek summary judgment as to "a claim, counterclaim, or cross-claim ... or any part thereof," Fed. R. Civ. Pro. 56(a)-(b), the parties in the underlying action have now filed six distinct motions for summary judgment. The first pair of cross-motions for summary judgment (discussed in Part III infra) deals generally with the extent of Defendants' liability, if any, under CERCLA and Indiana environmental law. The second pair of cross-motions concerns the Defendants' alleged contractual liability....
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