Emergency Serv. Billing Corp., Inc. v. Allstate Ins. Co.

Decision Date02 February 2012
Docket NumberNo. 11–2381.,11–2381.
PartiesEMERGENCY SERVICES BILLING CORPORATION, INC., individually (and as agent for) agent of Westville Volunteer Fire Department, Plaintiff–Appellant, v. ALLSTATE INSURANCE COMPANY, et al., Defendants–Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

OPINION TEXT STARTS HERE

Joseph Nicholas Williams (argued), Attorney, Price Waicukauski & Riley, LLC, Indianapolis, IN, for PlaintiffAppellant.

Curtis T. Jones, Attorney, Bose McKinney & Evans, LLP, John B. Drummy, Mark D. Gerth (argued), Attorneys, Kightlinger & Gray, Indianapolis, IN, Mark Alan Metzger, Attorney, Metzger Rosta, Noblesville, IN, Michael E. Tolbert, Attorney, Hoeppner Wagner & Evans LLP, Merrillville, IN, for DefendantsAppellees.

Richard K. Shoultz, Attorney, Lewis Wagner, LLP, Indianapolis, IN, for Amici Curiae.

Before BAUER, FLAUM, and SYKES, Circuit Judges.

FLAUM, Circuit Judge.

This appeal concerns the interpretation of the phrase “consumer product in consumer use” in the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). 42 U.S.C. § 9601 et seq. Plaintiff-appellant, Emergency Services Billing Corporation (ESBC), is the billing agent for the Volunteer Fire Department of Westville (Fire Department), a town in central Indiana. ESBC brought this action against individuals who were involved in motor vehicle accidents and the insurance companies that represent those individuals. Under CERCLA, the owner of a “facility” from which hazardous substances have been released is responsible for the response costs that result from the release. ESBC believes that personally-owned motor vehicles fall within the definition of “facilities” under CERCLA. Thus, ESBC charged the individual defendants, and therefore the insurance company defendants, with the response costs relating to their respective car accidents. Defendants argue that personal motor vehicles fall under CERCLA's “consumer product in consumer use” exception to the definition of “facilities,” and they have refused to pay ESBC for the response costs. ESBC has asked for declaratory relief in the form of a confirmation of the defendants' liability under CERCLA.

The district court held that motor vehicles for personal use do, in fact, fall under the “consumer product in consumer use” exception to CERCLA's definition of facility, and that defendants cannot be charged with the Fire Department's costs for responding to the car accidents. ESBC appeals, challenging the district court's interpretation of CERCLA. For the following reasons, we affirm the district court's dismissal of ESBC's suit.

I. Background

The facts of this case are few and are not in dispute. This case involves response costs that the Fire Department incurred in responding to four separate motor vehicle accidents. Defendants David Penton, Juan Jose Gomez Hernandez, Frank Dubczak, and Michael Baker each owned a vehicle that was involved in a car accident in LaPorte County, Indiana. Defendants Dubczak and Penton are insured by Progressive Insurance Company, defendant Baker is insured by Allstate Insurance Company, and defendant Hernandez is insured by State Farm Insurance Company. Each insurance company is a defendant in this suit as well. ESBC, as billing agent for the Fire Department, determined that each of the individual defendants was the owner of a vehicle involved in a collision that the Fire Department responded to, and that each of the defendants had liability insurance coverage. ESBC therefore provided invoices itemizing the response costs incurred by the Fire Department for each collision. The defendants, however, refused to pay those costs.

In response to defendants' refusal to pay, ESBC brought this declaratory action, asking the court to affirm that defendants are liable for response costs under CERCLA. Defendants filed answers and denied liability. Allstate and Baker also filed counterclaims against ESBC seeking injunctive relief from ESBC's billing practices and alleging claims for violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq., unjust enrichment, unlawful fee collection, fraud, constructive fraud, and insurance fraud.

State Farm eventually filed a motion for judgment on the pleadings according to Rule 12(c) of the Federal Rules of Civil Procedure. All defendants joined the motion. Defendant/counter-plaintiff Allstate also filed a motion for a preliminary injunction regarding ESBC's mailing of invoices and a motion for a hearing regarding the preliminary injunction. The district court granted defendants' motion for judgment on the pleadings, rendering Allstate's motions moot. In response to this ruling, ESBC filed a Rule 59(e) motion to alter or amend the judgment, which was denied.

For purposes of appellate jurisdiction, Allstate and Baker stipulated to the dismissal of their remaining counterclaims without prejudice. The district court construed that stipulation as a motion, and granted their motion to dismiss without prejudice. Given that all claims had therefore been dismissed, the court dismissed Allstate and Baker's entire case without prejudice. ESBC appealed the district court's judgment on the pleadings, but we questioned our jurisdiction over that ruling given the fact that the counterclaims were not dismissed with prejudice. ESBC therefore dismissed their appeal voluntarily and asked the district court for a Rule 54(b) entry of judgment, which would permit ESBC to appeal the court's dismissal of its suit before Allstate's countersuit was finally resolved. Fed.R.Civ.P. 54(b). The district court granted the Rule 54(b) motion, and the appeal is now properly before us.

II. Discussion

CERCLA was established by Congress to “provide for liability, compensation, cleanup, and emergency response for hazardous substances released into the environment and the cleanup of inactive hazardous waste disposal sites.” CERCLA, Pub.L. No. 96–510, 94 Stat. 2767 (1980). CERCLA imposes liability for “response costs” on the “owner and operator of a ... facility” from which a hazardous substance has been released. 42 U.S.C. § 9607(a)(1)(4). See also Amcast Industrial Corp. v. Detrex Corp., 2 F.3d 746, 748 (7th Cir.1993). Responders to situations involving hazardous materials can therefore bring private cost-recovery actions against facility owners responsible for the release of hazardous materials. Id. In order to succeed in an action for recovery of response costs under CERCLA, a plaintiff must prove the following elements: (1) the site in question is a ‘facility’ as defined by CERCLA; (2) the defendant is a ‘responsible person’ for the spill as defined by CERCLA; (3) there was a release of hazardous substances; and (4) such release caused the Plaintiff to incur response costs.” Envtl. Transp. Sys., Inc., v. ENSCO, Inc., 969 F.2d 503, 506 (7th Cir.1992). The only prong at issue in this appeal is the first prong: whether the motor vehicles at issue constitute “facilities” for the purposes of CERCLA liability. CERCLA defines “facility” as follows:

The term “facility” means (A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel.

42 U.S.C. § 9601(9) (emphasis added). Section 9601(9)(A) clearly contemplates that motor vehicles are facilities for the purposes of CERCLA. Section B, however, excludes “consumer product[s] in consumer use” from the definition of facility. The question, therefore, is whether a motor vehicle owned for personal use is a “consumer product in consumer use” under CERCLA.

The district court held that defendants' motor vehicles fall under the consumer products exception, and thus CERCLA response costs cannot be recovered by ESBC. We review a district court's ruling on a Rule 12(c) motion de novo. Buchanan–Moore v. Cnty. of Milwaukee, 570 F.3d 824, 827 (7th Cir.2009). As with Rule 12(b)(6) motions, we must view the facts alleged in the light most favorable to the non-moving party. N. Ind. Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir.1998).

ESBC argues that motor vehicles do not fall under the consumer product exception to facilities even if they are being used by individuals for personal use. In support of this contention, ESBC maintains that the phrase “consumer product” is ambiguous as it is used here, and thus we must look outside the statute to determine its meaning. Under Chevron v. Natural Res. Def. Council Inc., if a statutory term is ambiguous and there is an agency that administers the statute in question, courts must defer to the administering agency's interpretation of the ambiguous term. 467 U.S. 837, 843–44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). ESBC argues that the Environmental Protection Agency's (the “EPA”) interpretation of CERCLA should control since the EPA administers CERCLA. ESBC further maintains that the EPA's interpretation of the term “consumer product” does not include motor vehicles, and thus personal motor vehicles must be considered “facilities” under CERCLA.

Defendants disagree. They argue that the term “consumer product” as it is used in CERCLA unambiguously includes personal motor vehicles, and that any reference to interpretive tools outside the statute itself, including the EPA's interpretation, is inappropriate. Defendants also argue that the inclusion of motor vehicles in the definition of “consumer product” is consistent with the purposes of CERCLA. Defendants further maintain that sources outside of CERCLA, even if considered, actually bolster the position for which they advocate. Finally, defendants...

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