Emhart Indus., Inc. v. New Eng. Container Co.

• Decision Date: 17 September 2015
• Docket Number: CA 11–023 S.,Nos. CA 06–218 S,s. CA 06–218 S
• Citation: 130 F.Supp.3d 534
• Court: U.S. District Court — District of Rhode Island
• Parties: EMHART INDUSTRIES, INC., Plaintiff and Counterclaim Defendant, v. NEW ENGLAND CONTAINER COMPANY, INC.; et al., Defendants and Counterclaim Plaintiffs. Emhart Industries, Inc., Plaintiff and Counterclaim Defendant, v. United States Department of the Air Force; et al., Defendants, Counterclaim Plaintiffs, and Third–Party Plaintiffs, v. Black & Decker, Inc.; et al., Third–Party Defendants.

130 F.Supp.3d 534

EMHART INDUSTRIES, INC., Plaintiff and Counterclaim Defendant,

v.NEW ENGLAND CONTAINER COMPANY, INC.; et al., Defendants and Counterclaim Plaintiffs.

Emhart Industries, Inc., Plaintiff and Counterclaim Defendant,

v.United States Department of the Air Force; et al., Defendants, Counterclaim Plaintiffs, and Third–Party Plaintiffs,

v.Black & Decker, Inc.; et al., Third–Party Defendants.

Nos. CA 06–218 S

CA 11–023 S.

United States District Court, D. Rhode Island.

Signed Sept. 17, 2015.

Jeffrey M. Karp, Van P. Hilderbrand, Jr., Sullivan & Worcester LLP, Washington, DC, Jerome C. Muys, Jr., Swidler & Berlin, Chartered, Washington, DC, Joseph L. Beavers, Joseph W. Hovermill, Richard M. Brodsky, Miles & Stockbridge P.C., Baltimore, MD, Rachelle R. Green, Duffy & Sweeney, Ltd., Providence, RI, for Plaintiff and Counterclaim Defendant.

Bethany Engel, Environmental Enforcement Section, Washington, DC, Joshua M. Levin, U.S. Department of Justice, Washington, DC, Marla J. Gillman, Environmental Defense Section, Washington, DC, Phillip R. Dupre, Department of Justice, Enrd, Washington, DC, William D. Johnson, Air Force Legal Operations Agency, JB Andrews, MD, for Defendants and Counterclaim Plaintiffs.

PHASE I FINDINGS OF FACT AND CONCLUSIONS OF LAW

WILLIAM E. SMITH, Chief Judge.

Table of Contents

Introduction 538

I. Findings of Fact 541

A.	Site Description and Operational History	541
B.	Overview of Industrial Practices	543

1. Metro Atlantic's Main–Building Operations 543

a.	Destination of Solid Waste	543
b.	Destination of Liquid Waste	545

2.	Metro Atlantic's Trifluralin Operations	547
3.	NECC's Drum–Reconditioning Operations	547

a.	Drum Storage	548
b.	Drum–Reconditioning Processes	549

i.	Open–Head Drums	549
ii.	Closed–Head Drums	550

c. NECC's Use of the WDA 551

C. Metro Atlantic's HCP–Manufacturing Operations 551

1.	Storage of Crude Na 2, 4, 5–TCP	552
2.	Duration of Metro Atlantic's HCP–Manufacturing Operations	555
3.	Waste Streams of HCP–Manufacturing Process	557

a.	Destination of Liquid Waste	558
b.	Destination of Solid Waste	563

i.	Lay–Witness Testimony	563
ii.	Site Data	565

A. HCX 566

1.	Formation of HCX	566
2.	Location of HCX	567
3.	Colocation of HCX: Number of Nuchar Treatments	568
4.	Colocation with Two Nuchar Treatments	573

B. 2, 3, 7, 8–TCDD in the WDA 576

4. Soil in Vicinity of HCP Building Footprint 582

a.	Leaks and Spills	582
b.	Presence of Other Substances	583
c.	NECC as the Source of 2, 3, 7, 8–TCDD in This Area	584

i.	Dioxin–Congener Profile	585
ii.	DOD Drums	589

d. Metro Atlantic is Responsible for 2, 3, 7, 8–TCDD in the Area of the HCP Plant 594

5. Radiometric Dating of Pond Sediments 595

D.	Fate & Transport	597
E.	Incurrence of Response Costs	600

II. Conclusions of Law 602

A.	Emhart is Liable as a Past Operator under § 9607(a)	602
B.	Emhart Has Not Proven that the Harm at the Site is Divisible	603
C.	The DOD's Rule 52(c) Motion	609

III. Conclusion 611

Introduction

This environmental case arises from pollution discovered within the Centredale Manor Restoration Project Superfund Site ("Site") located in North Providence, Rhode Island. Plaintiff and Counterclaim Defendant, Emhart Industries, Inc. ("Emhart"), initiated this case in May 2006, when it asserted cost recovery and contribution claims under §§ 107(a) and 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), see 42 U.S.C. §§ 9607(a), 9613(f), against New England Container Co. ("NECC") and its insurers related to the pollution at the Site.¹ (C.A. No. 06–218, ECF No. 1.)² In January 2011, Emhart filed suit against the United States Department of the Air Force, the United States Department of the Navy, the United States Department of Defense, the secretaries of each of these departments, and the United States (collectively, "the DOD"), asserting CERCLA claims similar to those asserted in its case against NECC.³ (Emhart's Compl. ¶¶ 41–54, ECF No. 1.)

Since that time, the parties have filed a bevy of claims against one another: the DOD filed a CERCLA contribution counterclaim against Emhart (Counterclaim ¶ ¶ 42–44, ECF No. 32); the United States, on behalf of the Environmental Protection Agency ("the EPA" and, collectively with the DOD, "the Government"), filed a CERCLA cost recovery counterclaim against Emhart (Counterclaim ¶¶ 45–50, ECF No. 32); the Government filed a third-party complaint against Black & Decker, Inc. ("Black & Decker"), Emhart's successor, asserting the same claims as those asserted in its counterclaim against Emhart (ECF No. 34); Black & Decker filed a third-party counterclaim against the DOD, asserting the same claims that are asserted by Emhart in its claims against the DOD (ECF No. 49);⁴ the Government filed a crossclaim against NECC, asserting a CERCLA cost recovery claim and a CERCLA contribution claim on behalf of the DOD (ECF No. 67); NECC asserted CERCLA cost recovery and contribution crossclaims against the DOD (ECF No. 93); and the Government filed a claim against Emhart arising from its failure to comply with a CERCLA cleanup order (Gov't's 2d Am. Answer & Counterclaims ¶¶ 53–60, ECF No. 357; Gov't's 2d Am.3d Party Compl. ¶¶ 65–72, ECF No. 358).

This Court set a phased-trial schedule for this case (8th Rev. Case Mgmt. Order 2, ECF No. 295), which was modified multiple times to accommodate the parties' discovery needs.⁵ The first phase was slated to address the liability of Emhart and NECC, including divisibility and the proper allocation of responsibility between Emhart and NECC in the event that both were found jointly and severally liable under CERCLA. (Id. ) However, shortly before trial on the first phase commenced, NECC, which had "limited financial ability to pay for response costs incurred and to be incurred at the Site" (Consent Decree 2, ECF No. 375) settled with the Government for $8,750,000, the remainder of NECC's insurance coverage (id. at 2, 5), and a consent decree reflecting this settlement was approved and entered by this Court during trial.⁶ (Id. ) Therefore, the focus of the first phase of this case was narrowed to the questions of whether Emhart is liable under CERCLA and, if so, whether the harm is divisible. In addition, because of the "somewhat unique" position that the DOD occupied in this case based on the connection between its alleged conduct and Emhart's defenses (8th Rev. Case Mgmt. Order 2, ECF No. 295), this Court ordered the following:

All evidence pertaining to the [DOD's] liability for contamination of the Site will be presented during the first phase (the liability phase) of the trial. However, during this phase, the evidence will be used solely to determine the liability of Emhart and NECC and whether this liability (if proven) is divisible among the two parties. The Court will not rule on the liability of the [DOD], or its amount in contribution, if any, until the third phase when it considers the contribution of the Third–Party Defendants.

(Id. at 3.)⁷

As is relevant to the first phase of this case, the Government asserts a CERCLA cost recovery claim ("Count Two") and, on behalf of the DOD, a CERCLA contribution claim ("Count One") against Emhart. (See Gov't's 2d Am. Answer & Counterclaims ¶¶ 42–52, ECF No. 357; Gov't's 2d Am.3d Party Compl. ¶¶ 53–64, ECF No. 358.) Emhart principally denies any liability under CERCLA. (See Emhart's Proposed Findings of Fact & Conclusions of Law ("Emhart's Post-trial Br.") 150–62, ECF No. 378.) As a fallback, Emhart claims that, even if it is liable under § 9607(a), it is not jointly and severally liable for all response costs because the environmental harm for which it may be responsible is divisible from that caused by NECC. (See id. at 162–77, ECF No. 378.) Finally, Emhart continues to assert a CERCLA contribution claim ("Count Two") and a CERCLA cost recovery claim ("Count One") (and an accompanying declaratory-judgment claim relating to those claims) against the DOD.⁸ (See Emhart's 2d Am. Compl. ¶¶ 42–55, 65–68, ECF No. 69; Black & Decker's Answer & 1st Am. Counterclaim ¶¶ 30–50, ECF No. 367.)

The Court presided over a twenty-day bench trial beginning on May 18, 2015. After trial, the parties submitted post-trial briefs. (ECF Nos. 378–79.) After considering the evidence presented at trial and the pre- and post-trial memoranda submitted by the parties, the Court makes the following findings of fact and conclusions of law, pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.⁹ This Court's findings of fact have been grouped into the following categories: a brief background of the Site and the relevant operational history of the entities that occupied it; a general overview of the industrial practices of NECC and Metro Atlantic, Inc. ("Metro Atlantic");¹⁰ an in-depth discussion of Metro Atlantic's manufacture of hexachlorophene ("HCP"); findings regarding principles of fate and transport of contaminants and their application to the Site; and a brief discussion of the costs incurred by the EPA, as well as future costs, for the remediation of the contamination on the Site. In broad strokes, this Court finds that Metro Atlantic released a hazardous substance—namely, 2, 3, 7, 8–tetrachlorodibenzo–p–dioxin ("2, 3, 7, 8–TCDD")—to the Site through its manufacture of HCP, that the 2, 3, 7, 8–TCDD was transported to downstream areas, and that the EPA incurred response costs as a result of the release of dioxin.¹¹ From these findings of fact, this Court ultimately concludes that Emhart is jointly and severally liable under § 107(a) of CERCLA and that Emhart has not proved by a preponderance of the evidence that there is a reasonable basis in this evidentiary record to apportion the harm. This Court also finds that Emhart's claims against the DOD fail because Emhart did not prove by a preponderance of the evidence that the DOD drums purchased by NECC contained a hazardous substance. The tale follows.

I. Findings of Fact

A. Site Description and Operational History

The Site, which is depicted in Appendix A, spans a three-mile stretch of the Woonasquatucket River,¹² and encompasses an area labeled the Source Area ("peninsula"),...