Ergon v. Amoco Oil Co.

• Decision Date: 21 March 1997
• Docket Number: No. 96-2960 G/BRE.,96-2960 G/BRE.
• Citation: 966 F.Supp. 577
• Parties: ERGON, INC., Plaintiff, v. AMOCO OIL COMPANY, Defendant.
• Court: U.S. District Court — Western District of Tennessee

966 F.Supp. 577

ERGON, INC., Plaintiff, v. AMOCO OIL COMPANY, Defendant.

No. 96-2960 G/BRE.

United States District Court, W.D. Tennessee, Western Division.

March 21, 1997.

COPYRIGHT MATERIAL OMITTED

Charles G. Walker, Mary Aronov, Elizabeth E. Chance, Baker, Donelson, Bearman and Caldwell, Memphis, TN, for Plaintiffs.

Jean Markowitz, James D. Causey, Causey, Caywood, Taylor & McManus, Memphis, TN, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT AMOCO'S MOTION TO DISMISS AND GRANTING PLAINTIFF ERGON'S MOTION TO AMEND COMPLAINT

GIBBONS, Chief Judge.

Before the court is defendant Amoco Oil Company's ("Amoco") motion to dismiss filed on October 31, 1996 pursuant to Fed. R. Civ. Pro. 12(b)(6). In this action, plaintiff, Ergon, Inc., ("Ergon") seeks to recover from defendant the costs of cleaning up contamination caused by defendant's alleged spilling of gasoline products. Defendant contends that plaintiff has failed to state a cause of action under any of the theories presented in the complaint.

The allegations of the complaint are straightforward. Amoco owned a tract of land on President's Island between March 16, 1971, and July 6, 1983. Using the property as a tank farm, Amoco stored gasoline and other petroleum products on the site. Ergon purchased the land from defendant in the summer of 1983 and claims to have never stored or spilled gasoline products on the land.

Ergon alleges that it discovered ground water and soil contamination for which Amoco is responsible. Ergon allegedly is working to develop an acceptable remediation plan for the cleanup of the site at the request of the State of Tennessee; however, the contamination allegedly caused by defendant is continuing in its effect on the property and will continue until the site is cleaned up. Ergon alleges that the contamination presents an imminent and substantial endangerment to health and the environment.

Ergon sues under the Resources Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6972(a), and also asserts claims of negligence, restitution, unjust enrichment, strict liability, common law contribution, and implied private causes of action and subrogation under the Tennessee Water Quality Control Act and the Tennessee Solid Waste Disposal Act. It asks the court to enter a money judgment and issue an injunction ordering Amoco to clean up and properly dispose of gasoline contamination at the site.

A Fed. R. Civ. Pro. 12(b)(6) motion requires the court to determine whether plaintiff has asserted legally cognizable claims. The court must accept as true all factual allegations in the complaint, and the motion must be denied unless it appears beyond doubt that the non-movant can prove no set of facts which would permit relief. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983), cert. denied, 469 U.S. 826, 105 S.Ct. 105, 83 L.Ed.2d 50 (1984).

Plaintiff seeks relief under 42 U.S.C. § 6972(a)(1)(B),¹ which authorizes private actions to abate "imminent and substantial endangerments to health or the environment." Section 6972(a)(1)(B) provides that any person may commence such a civil action "against any person ... including ... any past or present owner or operator of a treatment, storage or disposal facility, who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of" the hazardous waste. Actions under this subsection require ninety (90) days notice to the Administrator of the Environmental Protection Agency, to the state in which the alleged violation occurs, and to any alleged violators prior to proceeding. 42 U.S.C. § 6972(a)(1)(B).

Amoco maintains that plaintiff's RCRA claim should be dismissed for failure to plead in the complaint that the statutorily required notice of the contamination was given to all required entities. The complaint alleges in paragraph 14 that notice was properly given to Amoco and in paragraph 10 that notice was given to the state. Amoco thus seeks dismissal because the complaint fails to allege notice to the EPA Administrator.

Although the United States Court of Appeals for the Sixth Circuit has ruled that compliance with RCRA's mandatory notice requirements is necessary to obtain subject matter jurisdiction, McGregor v. Industrial Excess Landfill, 856 F.2d 39, 43 (6th Cir. 1988) (citing Walls v. Waste Resource Corp., 761 F.2d 311, 316 (6th Cir.1985)), the notice requirement should be applied flexibly "to avoid hindrance of citizen's suits through excessive formalism," Proffitt v. Commissioners, Township of Bristol, 754 F.2d 504, 506 (3rd Cir.1985) (overruling district court's dismissal for lack of proper notice where plaintiff had not sent written notices, but administrative agencies nevertheless had notice-in-fact). Thus, permitting Ergon to amend its complaint to plead notice to all required entities is appropriate.² Ergon shall amend its pleadings within ten (10) days of this order to allege that it gave notice to all of the proper individuals and entities.

Amoco also maintains that the statute of limitations bars Ergons's citizen suit. Amoco correctly points out that RCRA does not contain a statute of limitations provision and submits that 28 U.S.C. § 2462³, the default statute of limitations in actions for enforcement of any civil fine or penalty, applies to citizens suits under RCRA. Amoco's argument is without merit, as the five year statute of limitations of 28 U.S.C. § 2462 plainly does not apply to actions under § 6972(a)(1)(B).

In Meghrig v. KFC Western, the United States Supreme Court held that 42 U.S.C. § 6972(a)(1)(B) does not authorize a private cause of action to recover the prior cost of cleaning up toxic waste that does not, at the time of suit, continue to pose an endangerment to health or the environment. ___ U.S. ___, 116 S.Ct. 1251, 134 L.Ed.2d 121 (1996). Section 6972(a)(1)(B), which permits citizen suits against persons responsible for "waste which may present an imminent and substantial endangerment to health or the environment," does not authorize a suit based upon an allegation that the contaminated site posed such an endangerment at some time in the past.⁴ As the Court explained, this timing restriction plainly means that an endangerment can only be "imminent" if it threatens to occur immediately. The reference to waste that "may present" imminent harm quite clearly excludes waste that no longer presents such a danger. Thus, "it follows that § 6972(a) was designed to provide a remedy that ameliorates present or obviates the risk of future `imminent' harms, not a remedy that compensates for past cleanup efforts." Id. at ___, 116 S.Ct. at 1255.

Delivering the opinion of the unanimous Court, O'Connor wrote that "other aspects of RCRA's enforcement scheme strongly support this conclusion." Id. First on this list of "other aspects" was RCRA's lack of a statute of limitations: "If RCRA were designed to compensate private parties for their past cleanup efforts, it would be a wholly irrational mechanism for doing so." Id. Because RCRA's primary purpose is to ensure the proper treatment, storage, and disposal of presently existing hazardous waste, the lack of a statute of limitations makes sense. Even though Amoco allegedly spilled petroleum more than thirteen years ago, Ergon can bring suit under § 6972(a)(1)(B) because it asserts that Amoco's alleged contamination currently poses "an imminent and substantial endangerment to health or the environment." (Complaint ¶ 15). See also Agricultural Excess and Surplus Ins. Co. v. A.B.D. Tank & Pump Co., 1996 WL 515088, *2 (N.D.Ill.) (rejecting statute of limitations defense in light of Supreme Court's recent Meghrig opinion).

Defendant next seeks dismissal of Ergon's RCRA claim because the state "has commenced and is diligently prosecuting an action" against defendant.⁵ Ergon responds that the State of Tennessee is not "prosecuting an action" against it. In this argument, Amoco relies upon paragraph 10 of the complaint which alleges that Ergon, at the state's request, is working to develop an acceptable remediation plan. Such an allegation hardly amounts to an assertion that the state is "prosecuting an action."⁶ Amoco's motion is therefore without merit.

Amoco's motion also addresses Ergon's various tort claims under Tennessee law. Amoco submits that the claims for negligence and strict liability are barred by the applicable statute of limitations. The parties agree that the three year statute of limitations of T.C.A. § 28-3-105 applies to this cause of action, but disagree as to whether the application of the "discovery rule" creates a genuine issue of material fact as to the statute of limitations issue.

Under the "discovery rule" applicable in tort actions, the cause of action accrues and the statute of limitations begins to run when the injury occurs or is discovered, or when in the exercise of reasonable care and diligence, it should have been discovered. Potts v. Celotex, 796 S.W.2d 678, 680 (Tenn. 1990) (citations omitted). "Discovery" means the discovery of the existence of a right of action, that is, facts which would support an action for tort against the tortfeasor. Hathaway v. Middle Tennessee Anesthesiology, 724 S.W.2d 355, 359 (Tenn.App.1986).

The discovery rule applies only in cases where the plaintiff does not discover and reasonably could not be expected to discover that he had a right of action. Id. Furthermore, the statute is tolled only during the period when the plaintiff had no knowledge at all that the wrong had occurred and, as a reasonable person, was not put on inquiry. Hoffman v. Hospital Affiliates, 652 S.W.2d 341, 344 (Tenn.1983). Once the suspicion of wrongdoing has arisen, the limitations period runs, and the plaintiff is under a duty to investigate with reasonable diligence.

Here, Amoco argues that Ergon was put on reasonable inquiry when it learned of gasoline contamination on the premises, and asserts, without...