Employers Ins. of Wausau v. Browner

• Decision Date: 27 April 1994
• Docket Number: No. 91 C 4254.,91 C 4254.
• Citation: 848 F. Supp. 1369
• Parties: EMPLOYERS INSURANCE OF WAUSAU A MUTUAL COMPANY, a mutual insurance corporation, Plaintiff, v. Carol M. BROWNER, as Administrator of the United States Environmental Protection Agency; Valdas V. Adamkus, as Regional Administrator of Region V of the United States Environmental Protection Agency; William E. Muno, as Acting Director of the Office of Waste Programs Enforcement of the United States Environmental Protection Agency; and The United States Environmental Protection Agency, and United States of America, Defendants.
• Court: U.S. District Court — Northern District of Illinois

848 F. Supp. 1369

EMPLOYERS INSURANCE OF WAUSAU A MUTUAL COMPANY, a mutual insurance corporation, Plaintiff, v. Carol M. BROWNER, as Administrator of the United States Environmental Protection Agency; Valdas V. Adamkus, as Regional Administrator of Region V of the United States Environmental Protection Agency; William E. Muno, as Acting Director of the Office of Waste Programs Enforcement of the United States Environmental Protection Agency; and The United States Environmental Protection Agency, and United States of America, Defendants.

No. 91 C 4254.

United States District Court, N.D. Illinois, E.D.

April 27, 1994.

COPYRIGHT MATERIAL OMITTED

Daniel Charles Murray, Daniel A. Dupre, Joseph Gerard Lyons, Frederick S. Mueller, Johnson & Bell, Ltd., Chicago, IL, Linda Anne Thiel, Robert M. Wattson, Rolf E. Gilbertson, Sandra Wallace, David C. Linder, Zelle & Larson, Minneapolis, MN, for plaintiff.

Jonathan C. Haile, James Michael Kuhn, Asst. U.S. Atty., Chicago, IL, Alan D. Greenberg, U.S. Dept. of Land & Natural Resources, Elizabeth A. Strange, Nancy Gaines, U.S. Dept. of Justice, Civ. Div., Washington, DC, for defendants.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Plaintiff Employers Insurance of Wausau brings this four count action against the United States of America, the United States Environmental Protection Agency, and various Environmental Protection Agency officials.¹ Presently before the court is defendants' motion of judgment on the pleadings. For the reasons set forth below, the federal defendants' motion is granted.

I. Judgment on the Pleadings Standard²

A party is entitled to judgment on the pleadings only if that party "clearly establishes that no material issue of fact remains to be resolved and that he or she is entitled to judgment as a matter of law." National Fidelity Life Ins. Co. v. Karaganis, 811 F.2d 357, 358 (7th Cir.1987) (citing Flora v. Home Fed. Savings & Loan Ass'n, 685 F.2d 209, 211 (7th Cir.1982)). We will consider only matters presented in the pleadings, and will view the facts in the light most favorable to the non-moving party. National Fidelity, 811 F.2d at 358 (citing Republic Steel Corp. v. Pa. Eng'g Corp., 785 F.2d 174, 177 n. 2 (7th Cir.1986)).

II. Factual Background³

On August 24, 1987, fire struck and destroyed a building located in Wyandotte, Michigan. The building's occupant held a policy with plaintiff Employers Insurance of Wausau ("Wausau"), which covered certain perils, including fire, as well as the expense of debris removal resulting from such perils. At the Wyandotte property, this debris included several electrical transformers. In a settlement with the policyholder, Wausau agreed to have certain fluids and oils drained from the transformers and removed from the site. In April, 1989, seven hundred gallons of fluids were removed from the transformers and transported to an oil recycling facility in Romulus, Michigan, where the fluids were placed in process tanks for recycling.

The following month, it was discovered that the Romulus facility was contaminated with polychlorinated biphenyls ("PCBs")⁴ and volatile organic compounds ("VOCs").⁵ The source of the PCB contamination was traced to the oil which had been used in the transformers at the Wyandotte building. On September 11, 1989, the Environmental Protection Agency ("EPA") designated Wausau as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. § 9601 et seq.,⁶ and demanded Wausau's participation in the cleanup. Wausau did not respond, and in November, 1989, the EPA issued a unilateral administrative order directing Wausau and the other involved parties to begin emergency cleanup measures. Wausau strenuously objected, claiming that the EPA's characterization of Wausau's role in the transportation and disposal of the fluids was "materially incorrect," "erroneous, arbitrary and wrongful." After some further wrangling, the EPA filed an administrative action against Wausau under the Toxic Substance Control Act, 15 U.S.C. § 2601 et seq., in an effort to force Wausau to comply with the order. Without admitting any responsibility, Wausau relented and submitted an Emergency Response Action Plan ("ERAP"), setting forth the manner in which it would comply with the order. The EPA approved Wausau's ERAP on February 26, 1990.

The Order itself listed thirty-three findings which detailed the various parties' involvement in the PCB contamination at the Romulus facility. It further specified that "hazardous substances" were present at the site, both due to the PCB contamination and because there existed waste in drums which contained high levels of VOCs. The order therefore called for the disposal and treatment of "all materials containing hazardous substance, pollutants or contaminants removed pursuant to this Order." These requirements of the Order were not limited to PCB-contaminated areas.

The ERAP, drafted by Wausau and approved by the EPA, was expressly designed to "comply with the Order to the extent technically feasible under climatic conditions existing at the Site...." The ERAP is somewhat more PCB specific, setting forth particular requirements with respect to PCB contamination. However, it also contains several broad statements about Wausau's obligations at the Site. Finally, the ERAP expressly amended the Order to allow Wausau 180 days to complete its cleanup activities.

Following the EPA's approval of the ERAP, Wausau began its cleanup. However, in several telephone calls and letters to the EPA, Wausau indicated that it did not believe that it would be responsible for cleaning up any non-PCB contamination under the Order and the ERAP. In response, the EPA consistently maintained that both the Order and the ERAP were worded broadly and were not limited to PCB contamination, and that Wausau was required to clean up all hazardous substances located at the Site. However, Wausau persisted in its interpretation of the Order and ERAP, and claimed that it completed the prescribed cleanup on January 24, 1991, some 331 days after approval of the ERAP, or 151 days late. At no time did Wausau submit a written request for an extension of time, as required by the Order.

On March 22, 1991, Wausau filed a petition for reimbursement of reasonable response costs pursuant to § 9606(b)(2) of CERCLA. The EPA responded to Wausau's request by letter dated June 10, 1991, refusing to grant relief on the grounds that Wausau had not fully complied with the requirements of the § 9606 order and the ERAP. Wausau disputed the EPA's assessment of the work performed, claiming that the cleanup measures listed by the EPA were either complied with or not required by the order or the ERAP. To support its position, Wausau inspected the CIW site on June 24, 1991, and submitted "Post Response Action Compliance Comments" to the EPA on July 9, 1991. Nonetheless, the EPA hired an additional contractor to conduct further cleanup measures at the CIW site. The contractor completed the actions required by the administrative order on October 25, 1991.

Wausau brought the instant action on July 9, 1991. Following a motion to dismiss, which we granted in part and denied in part, see Employers Ins. of Wausau v. Bush, 791 F.Supp. 1314 (N.D.Ill.1992), four counts remained, asserting violations of procedural due process, substantive due process, and equal protection, along with a claim under the Administrative Procedure Act.⁷ The defendants have now moved for judgment on the pleadings on these remaining claims.

III. Statutory Background

Enacted in 1980, "CERCLA was designed `to bring order to the array of partly redundant, partly inadequate federal hazardous substances clean up and compensation laws.'" Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380, 1386 (5th Cir.1989) (quoting New York v. Shore Realty Corp., 759 F.2d 1032, 1040 (2d Cir.1985)). The primary purpose of CERCLA is "the prompt cleanup of hazardous waste sites." J.V. Peters & Co. v. Administrator, Environmental Protection Agency, 767 F.2d 263, 264 (6th Cir.1985). To this end, upon a determination that there is an actual or threatened release of a hazardous substance,⁸ CERCLA gives the EPA the authority (1) to take direct response action to clean up a site and later seek reimbursement from responsible parties, CERCLA § 9604(a), or (2) to require those responsible parties to conduct the cleanup themselves.⁹ CERCLA § 9606(a); see also Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1324 (7th Cir.1990). In the event the EPA chooses the latter course, it first identifies potentially responsible parties ("PRPs"), and requests voluntary help in the clean-up process. If the EPA receives no response, it issues an administrative order naming all of the PRPs and demanding their immediate assistance. At this point, a PRP has two alternatives. It may ignore the administrative order and wait for the EPA to bring an enforcement action against it. In the event the EPA brings such an action, the PRP is entitled to a judicial hearing prior to its forced involvement in the clean-up. CERCLA § 9613(h). However, the PRP is subject to significant, albeit discretionary, fines in the event it is determined that its failure to comply with the order was without "sufficient cause." CERCLA § 9606(b)(1).

On the other hand, the PRP may proceed with the clean-up, and subsequently petition the EPA for reimbursement of the funds it expended. CERCLA § 9606(b) This alternative was added as part of the SARA amendments of 1986 in order to "encourage potentially responsible parties to conduct a cleanup expeditiously and postpone litigation about responsibility to a later time." Bethlehem Steel, 918 F.2d at 1324. Specifically, CERCLA provides that those parties that "receive and comply" with a cleanup order are entitled to petition the...