Environmental Transp. Systems, Inc. v. ENSCO, Inc.

Decision Date30 July 1992
Docket NumberNos. 91-1847,91-2216,s. 91-1847
Citation969 F.2d 503
Parties, 22 Envtl. L. Rep. 21,361 ENVIRONMENTAL TRANSPORTATION SYSTEMS, INCORPORATED, also known as Environmental Transportation Services, Incorporated, an Oklahoma corporation, and Canal Insurance Company, a South Carolina corporation, Plaintiffs-Appellants, v. ENSCO, INCORPORATED, an Arkansas corporation, both individually and as successor in interest to Energy Systems Company, an Arkansas corporation, and Northern States Power Company, a Minnesota corporation, Defendants-Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

Robert J. Noe, Bozeman, Neighbour, Patton & Noe, Moline, Ill., William D. Pettigrew, argued, Linda G. Alexander, Niemeyer, Noland & Alexander, Oklahoma City, Okl., for Canal Ins. Co., Environmental Transp. Systems, Inc. in No. 91-1847.

Gabriel M. Rodriguez, argued, Sheldon A. Zabel, Schiff, Hardin & Waite, Chicago, Ill., Willis Conkhite, III, Little Rock, Ark., for Ensco, Inc., Energy Systems Co., and N.S.P. Co.

Robert J. Noe, Bozeman, Neighbour, Patton & Noe, Moline, Ill., Linda G. Alexander, Kenneth D. Upton, Jr., William D. Pettigrew, argued, Niemeyer, Noland & Alexander, Oklahoma City, Okl., for Canal Ins. Co., Environmental Transp. Systems, Inc., in No. 91-2216.

Before COFFEY and KANNE, Circuit Judges, and WOOD, Jr., Senior Circuit Judge.

HARLINGTON WOOD, Jr., Senior Circuit Judge.

Environmental Transportation Systems, Incorporated and its insurer, Canal Insurance Company, appeal the district court's decision to allocate to Environmental Transportation Systems, Incorporated the entire cost of cleaning up a spill of poly-chlorinated biphenyl dielectric fluid arising from a single vehicle accident that occurred on an Illinois interstate highway interchange ramp in November 1984. 763 F.Supp. 384 (C.D.Ill.1991). Environmental Transportation Systems, Incorporated and Canal Insurance Company brought a contribution action contending that ENSCO, Incorporated and Northern States Power Company are responsible for some of the cleanup costs because both entities are strictly liable under the Comprehensive Environmental Response and Liability Act. Environmental Transportation Systems, Incorporated also contends that ENSCO, Incorporated

                is partially at fault for the spill for allegedly failing to comply with certain Department of Transportation regulations.   We affirm the district court's decision
                
BACKGROUND FACTS

In 1984 Northern States Power Company ("Northern States") contracted with ENSCO, Incorporated ("ENSCO"), an Arkansas waste disposal firm, to remove and dispose of approximately 100 out-of-service electrical transformers containing poly-chlorinated biphenyl ("PCB") dielectric fluid. 1 At that time ENSCO had an agreement with Environmental Transportation Systems, Incorporated ("ETS"). Under the agreement ETS provided tractors, flat-bed trailers equipped with spill-containment measures, and drivers. ETS also provided all necessary insurance.

The agreement between ENSCO and Northern States provides that the transformers would be shipped to ENSCO's disposal facility without first draining the transformers of the PCB-laced mineral oil they contained. The transformers were not packaged in any special manner for shipment. They were loaded onto ETS trucks by crane. The ETS trailers were modified by welding a lip around the outer edge of the flat-bed trailer in order to create a tub around the transformers. The tub did not contain any absorbent material. Presumably it was hoped that the tub would contain any PCBs that happened to leak out of the transformers during shipment. All of these specifications were negotiated between Northern States and ENSCO; ETS did not participate in the decision to haul the PCB-filled transformers to the disposal site instead of first draining the transformers and then hauling the PCBs in a tank truck.

On November 9, 1984, Ronald Fresh, an ETS driver, was hauling a load of three Northern States transformers on a modified flat-bed trailer. Fresh exited Interstate 74 and was entering Interstate 80 near Moline, Illinois when he lost control of his rig. When Fresh drove onto the interchange, he did not know the road had an "S" curve, so after negotiating the first curve he found he was not in proper position to get around the second one. He ended up driving off the road, and the truck flipped over on its side. One of the transformers punctured a second one and approximately 100 gallons of PCBs spilled. Fresh testified in a deposition that an Illinois state trooper arrived at the accident site within fifteen minutes. The state trooper issued Fresh a citation for driving too fast for conditions, and Fresh later pleaded guilty to the charge.

After the accident state troopers kept Fresh for two hours before they finally allowed him to call his contact at ETS. ETS in turn notified ENSCO because ETS did not have the capability to make the proper response. An emergency response unit from ENSCO arrived after several hours. Cleanup of the site took place over the next few months. ENSCO paid for and supervised this cleanup. 2 Northern States did not help in the cleanup, nor did it bear any of the costs associated with cleaning up the spill.

ETS submitted a claim to its insurer, Canal Insurance Company ("Canal"), for the amount of ETS's reimbursement to ENSCO. Canal did not honor the claim. Eventually three lawsuits arising out of litigation between ETS and Canal were settled, and Canal agreed to pay approximately half of ETS's claim. During the litigation, ETS's vice-president, David Kennedy, stated in an affidavit that the "sole cause of the accident was the vehicle being driven at an excessive speed as it attempted to negotiate a curved exit/access ramp." Kennedy also concluded after conducting an investigation of the accident Based upon the investigation performed by ETS, it has no basis in fact to assert that anyone else other than its own employee [Fresh, the driver] is responsible for the accident and the resulting PCB spill. ETS has determined the speed of its driver was excessive for the conditions and posted limits. There is no indication inclement weather was present or contributed in any way to the accident.

Kennedy was installed as vice-president after the accident, and he made these conclusions solely by reviewing records of the accident.

In January 1989, ETS and Canal (hereafter collectively referred to as "ETS") filed a lawsuit against ENSCO and Northern States. In the count relevant to this appeal, ETS demanded from ENSCO and Northern States pro rata shares in contribution for cleanup costs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). ETS moved for summary judgment on July 17, 1990, asserting that ENSCO and Northern States were liable as a matter of law under CERCLA and that the court should apportion cleanup costs equally among the parties because the parties' relative responsibility could not be diffused in any objective fashion.

ENSCO and Northern States filed a cross-motion for summary judgment on August 27, 1990. They argued that even if they were liable under CERCLA, the section of CERCLA concerning contribution directs the court to take into account equitable factors, including the relative fault of the parties. In replying to ENSCO's and Northern States's cross-motion, ETS admitted that courts may take into account the relative fault of the parties in apportioning liability under CERCLA. ETS then asserted improper loading of the transformers onto the truck caused the spill, not that Fresh was driving too fast. In support of this assertion, ETS cited certain Department of Transportation regulations that were allegedly not complied with. However, ETS submitted no expert testimony or lay opinion to support its theory that improper loading of the transformers rather than the fact that Fresh was driving too fast to negotiate the curve in the road caused the accident.

On March 12, 1991, the district court held that ENSCO and Northern States were liable parties under CERCLA. However, the court concluded that CERCLA liability does not necessarily lead to mandatory contribution for cleanup costs. The district court concluded that ETS was responsible for all of the costs of cleanup because the accident was entirely ETS's fault. In coming to this conclusion, the district court decided that EPA regulations under the Toxic Substances Control Act ("TSCA") and not regulations under the Transportation Safety Act ("DOT regulations") applied to the transportation of PCBs. Consequently, any possible violation of the DOT regulations was irrelevant to a finding of fault. The district court further decided that ENSCO had complied with the relevant TSCA regulations and that ETS had put forth no evidence to rebut ENSCO's evidence that the spill was entirely ETS's fault.

ETS now comes to this court to appeal the district court's judgment.

ANALYSIS

Section 9613(f) of Title 42, United States Code, provides that any person may seek contribution from any other person who is liable or potentially liable under CERCLA, 42 U.S.C. §§ 9601 et seq. As the district court noted, to establish a defendant's liability under CERCLA, a four-part test must be met: (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. Environmental Transportation Systems, Inc. v. ENSCO, Inc., 763 F.Supp. 384, 387 (C.D.Ill.1991) (citing United States v. Aceto Agr. Chemicals Corp., 872 F.2d 1373, 1378-79 (8th Cir.1989)). The district court concluded that the four-part test was met in this case and that ENSCO was liable for contribution under CERCLA, and the district court granted ETS's motion for summary judgment On appeal ETS argues it sought...

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