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

• Decision Date: 17 August 2017
• Docket Number: C.A. No. 11–023 S,C.A. No. 06–218 S
• Citation: 274 F.Supp.3d 30
• 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.
• Court: U.S. District Court — District of Rhode Island

274 F.Supp.3d 30

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.

C.A. No. 06–218 S

C.A. No. 11–023 S

United States District Court, D. Rhode Island.

Signed August 17, 2017

Alexander P. Creticos, Joseph L. Beavers, Joseph W. Hovermill, Richard M. Brodsky, Miles & Stockbridge P.C., Baltimore, MD, Emily J. Migliaccio, Rachelle R. Green, Cervenka Green Ducharme Antonelli LLC, Providence, RI, Jeffrey M. Karp, Van P. Hilderbrand, Jr., Sullivan & Worcester LLP, Jerome C. Muys, Jr., Swidler & Berlin, Chartered, Washington, DC, for Plaintiff and Counterclaim Defendant.

Joshua M. Levin, Marla J. Gillman, Phillip R. Dupre, Bethany Engel, U.S. Department of Justice, Washington, DC, William D. Johnson, Air Force Legal Operations Agency, JB Andrews, MD, John Peloso, F.X., Jr., Megan E. Baroni, Robinson & Cole LLP, Stamford, CT, James P. Ray, Robinson & Cole LLP, Hartford, CT, Steven J. Boyajian, Robinson & Cole LLP, Todd D. White, Adler Pollock & Sheehan P.C., Jason C. Preciphs, R. Kelly Sheridan, Roberts, Carroll, Feldstein & Peirce, Inc., Rachelle R. Green, Cervenka Green Ducharme Antonelli LLC, Providence, RI, Katy A. Hynes, Warwick, RI, Louis H. Kozloff, Goldberg Segalla LLP, Philadelphia, PA, Michael Hamilton, Nelson Brown & Co., Blue Bell, PA, John A. Nadas, Robert A. Kole, Choate, Hall & Stewart, LLP, Boston, MA, for Defendants and Counterclaim Plaintiffs.

PHASE II FINDINGS OF FACT AND CONCLUSIONS OF LAW

William E. Smith, Chief Judge

I. Introduction

Dioxin and other toxic chemical pollution at the Centredale Manor Restoration Project Superfund Site ("Centredale Site" or "Site") in North Providence, Rhode Island, has led to going on ten years of litigation over which parties are responsible and what is the appropriate remedy. The Court divided the litigation into three phases. (See Eighth Revised Case Management Order, ECF No. 295.)¹ At the close of trial in Phase I, the Court found Emhart jointly and severally liable for the release of dioxin at the Site. The Court has now concluded Phase II of the trial² and must provide findings of fact and conclusions of law addressing the following two issues: (1) whether the Environmental Protection Agency's ("EPA") remedy-selection process was arbitrary, capricious, or otherwise not in accordance with law; and (2) whether Emhart had sufficient cause to refuse to comply with EPA's June 10, 2014 Administrative Order. The necessary contributions, if any, of third-party defendants will be addressed in Phase III of the trial.

The Court provided a comprehensive background discussion and procedural history of this case in its Phase I opinion and need not repeat it here. (See Phase I Findings of Fact and Conclusions of Law ("Phase I Findings"), ECF No. 405.) However, since issuing the Phase I Findings, there have been three new and important developments in the case relating to the Phase II litigation. First, the parties have come to an agreement regarding the United States' past response costs in light of the Court's findings in Phase I. (See Stipulation Regarding United States' Past Response Costs, ECF No. 444.) As such, the Court need not determine the amount of past response costs.

Second, the Government moved to limit the scope of judicial review during Phase II. (Gov't Mot. to Limit Disc. and Scope of Review, ECF No. 415.) The Government argued that, because judicial review under CERCLA is strictly limited to the administrative record, Emhart should be prohibited from presenting any evidence or arguments not found in the administrative record. Emhart opposed the Government's motion, arguing that review under CERCLA is not so limited. (Emhart Obj., ECF No. 416.) The Court denied the Government's motion without prejudice, thereby allowing Emhart to conduct discovery and present the objected to evidence and arguments at trial. (Order Den. Mot. to Limit Disc. and Scope of Review 6, ECF No. 421.) However, the Court has reserved its judgment on the ultimate admissibility of the challenged evidence and arguments to this point. (Id. at 6.)

Third, and lastly, the Government moved to exclude certain portions of testimony provided by Emhart's expert, Mr. Jeffrey Loureiro. (Gov't Mot. to Exclude Certain Test. of Jeffrey Loureiro, ECF No. 447.) The Government argued that significant portions of Mr. Loureiro's opinions had not been disclosed in his expert report in violation of Rule 26(a)(2) of the Federal Rules of Civil Procedure. According to the Government, the admission of Mr. Loureiro's testimony would be "highly prejudicial ... given the United States' inability to explore such opinions through discovery or to counter them effectively through rebuttal testimony." (Id. at 2.) In light of the Government's concerns, the Court decided to allow the testimony of Mr. Lourerio but provided the Government an opportunity to conduct additional discovery and to designate and utilize rebuttal experts to address the concerns highlighted in the Government's motion. The Court therefore denied that motion as moot. (Text Order of 10/07/2016.)

In this decision, the Court will set forth its findings of fact and conclusions of law with regards to the question of remedy, and address along the way the various issues reserved to this point. See Fed. R. Civ. P. 52(a)(1). The decision begins with an overview of the CERCLA process by which EPA may choose a response action, as well as the standards of judicial review for challenges to a response action. Next the Court provides specific findings of fact, starting with a history of EPA action at the Site, and then moving into the topics which provide the bases for Emhart's challenge. After each topic the Court provides conclusions of law.

II. Remedy Selection

Congress enacted the Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., "in response to the serious environmental and health risks posed by industrial pollution." United States v. Bestfoods, 524 U.S. 51, 55, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998). To address those risks, CERCLA "grants the President broad power to command government agencies and private parties to clean up hazardous waste sites." Id. (quoting Key Tronic Corp. v. United States, 511 U.S. 809, 814, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994) ). These cleanup efforts are called "response actions," and may require both "the cleanup or removal of released hazardous substances" as well as other "remedial action ... to prevent or minimize the release of hazardous substances." 42 U.S.C. § 9601(23) - (25).

EPA acts on the President's behalf in choosing the appropriate response action. See Exec. Order No. 12580 (b)(1), (g). In doing so, EPA must work within the framework provided by CERCLA and the National Contingency Plan ("NCP"). See 42 U.S.C. 9604(a)(1) (requiring EPA to act "consistent with the national contingency plan"); National Contingency Plan, 40 C.F.R. § 300, et seq. In addition, EPA has established various guidance documents to assist in the CERCLA process. While these guidance documents are non-binding on EPA, they do represent EPA's collective wisdom as to best practices.³ The steps required by CERCLA and the NCP, and implemented with the assistance of EPA guidance documents, are outlined below.

A. National Priorities List

The first step in the CERCLA process is placing a site on the National Priorities List ("NPL"). See 42 U.S.C. § 9605(a)(8)(b) ; 40 C.F.R. § 300.425. A site is appropriately included on the NPL if, for example, EPA determines that a hazardous substance poses "a significant threat to public health." Id. § 300.425(c)(3)(ii). A notice and comment period is required before a site is officially placed on the NPL. Id. § 300.425(d)(5). Once the notice and comment process is complete, and if EPA determines that NPL listing is still appropriate, EPA may begin the process of developing a response action for the site.

B. Remedial Investigation and Feasibility Study

EPA is required to conduct a remedial investigation ("RI") and feasibility study ("FS") before choosing a response action. The end goal of the RI/FS process is "to assess site conditions and evaluate alternatives to the extent necessary to select a remedy." Id. § 300.430(a)(2). The first step is the RI, which seeks to "collect data necessary to adequately characterize the site for the purpose of developing and evaluating effective remedial alternatives." Id. § 300.430(d)(1). EPA is given significant leeway to develop a RI process specific to the site. But, at a minimum, EPA must conduct a field investigation (i.e., collect site-specific data) and create a baseline risk assessment. Id.

The data collected during the field investigation includes the physical characteristics of the site and the hazardous material present as well as the exposure pathways through which the hazardous material may affect human health and the environment.

Id. § 300.430(d)(2)(i)-(vii). Part of this process involves estimating the reasonable maximum exposure that is likely to occur for both current and potential future land use at the site. (EPA, Interim Final Risk Assessment Guidance for Superfund ("IFRAGS"), vol. I, Emhart579–24.) EPA then uses this data in the baseline risk assessment to understand the extent to which hazardous materials pose a threat to human health and the environment, as well as what would be "acceptable exposure levels" for the site going forward. 40 C.F.R. § 300.430(d)(4).

At this point, EPA transitions from the RI process of collecting data to the FS process of finding a remedy.⁴ "The national goal of the remedy-selection process is to select remedies that are protective of human health and the environment, that maintain...