FMC Corp. v. Northern Pump Co.

• Decision Date: 20 August 1987
• Docket Number: Civ. No. 4-84-1365.
• Parties: FMC CORPORATION, a Delaware corporation, Plaintiff, v. NORTHERN PUMP COMPANY, a Minnesota corporation, Defendant and Third-Party Plaintiff, v. UNITED STATES of America, and Northern Ordnance, Inc., a Minnesota corporation, Third-Party Defendants.
• Court: U.S. District Court — District of Minnesota

668 F. Supp. 1285

FMC CORPORATION, a Delaware corporation, Plaintiff, v. NORTHERN PUMP COMPANY, a Minnesota corporation, Defendant and Third-Party Plaintiff, v. UNITED STATES of America, and Northern Ordnance, Inc., a Minnesota corporation, Third-Party Defendants.

Civ. No. 4-84-1365.

United States District Court, D. Minnesota, Fourth Division.

August 20, 1987.

COPYRIGHT MATERIAL OMITTED

Joe A. Walters and Wm. E. Flynn, O'Connor and Hannan, Minneapolis, Minn., for plaintiff and Northern Ordnance; William W. Warren, FMC Corp., of counsel.

William Killion, David Coyne, Gray, Plant, Mooty, Mooty & Bennett, Minneapolis, Minn., for defendant and third-party plaintiff.

Letitia J. Grishaw, Land & Natural Resources Div., Environmental Defense Section, U.S. Dept. of Justice, Washington, D.C., for the U.S.

ORDER

DOTY, District Judge.

This action arises out of plaintiff FMC's suit against defendant Northern Pump Company ("Pump") for a declaratory judgment and recovery of response costs and future damages, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601-9657, and under claims of contribution and indemnity. Jurisdiction is alleged under 28 U.S.C. §§ 1331 and 1332. Pump has filed a third-party Complaint against third-party defendant, Northern Ordnance, Inc. ("Ordnance") for a declaration in contribution and indemnity under CERCLA, and under claims of breach of lease, negligence, nuisance, and vicarious liability to the extent Pump is found liable to FMC. It has also filed a third-party Complaint against third-party defendant, the United States, for a declaration in contribution and indemnity under the Federal Torts Claims Act, 28 U.S.C. §§ 2671-2680 and CERCLA, 42 U.S.C. § 9601-9657. This matter is before the Court on two motions for summary judgment. Pump seeks summary judgment on all claims in FMC's Complaint or alternatively, for partial summary judgment on FMC's claims that Pump is liable for the acts of Ordnance. Ordnance seeks summary judgment on Pump's third-party claims against it.

Background

FMC is a conglomerate operating a manufacturing plant through its Northern Ordnance Division in Fridley, Minnesota. In 1980, the Minnesota Pollution Control Agency ("MPCA") learned that a tract south of the manufacturing plant had been used as a waste disposal site. Upon investigation by the United States Environmental Protection Agency, MPCA, and FMC, it was discovered that this site contained harmful waste products, particularly including trichloroethylene ("TCE"), which are defined as hazardous under Section 9601(14) of CERCLA, and that the disposal of these products occurred for several years prior to and after 1964.

On June 8, 1983, FMC entered into an Administrative Order and Interim Response Order by Consent under which FMC agreed to take remedial action to clean up the facility. On October 14, 1986, FMC entered into a second Response Order by Consent pursuant to which it is obligated to clean up the contaminated groundwater under the facility. FMC has incurred and will continue to incur significant response costs in cleaning up the facility.

Pump owned, or owned in part, the Fridley facility from July 2, 1945 to January 31, 1964. Pump's predecessor, also called Northern Pumnp Co. ("Pump 1"), built the facility in 1940 for the purpose of manufacturing ordnance for the use of the United States Navy. Pump 1 incorporated Ordnance in 1942 as its wholly owned subsidiary to operate the facility, and leased it to Ordnance. In 1945 Pump 1 transferred its assets, including its shares of Ordnance, to Hawley Company, which changed its name to Northern Pump Company, the defendant herein. Pump continued to lease the facility, or that part which it owned, to Ordnance until 1964.

On September 18, 1947, Pump sold a major portion of the facility to the United States Navy. Thereafter, Ordnance operated the facility pursuant to separate leases with Pump and the United States Navy.

Pump and FMC entered into negotiations in 1963 for the sale of Pump's interest in Ordnance to FMC. The parties reached an agreement as to the terms of the sale on December 31, 1963 (the "1963 Agreement" or the "Agreement"). This Agreement became effective in 1964. Pursuant to the terms of the Agreement, Pump sold FMC all its shares of Ordnance, and all assets which it owned. Since 1964, FMC has operated the facility through its Northern Ordnance Division. FMC undisputedly continued the disposal of hazardous waste, through that division, until 1969.

FMC seeks to recover that portion of its cleanup costs attributable to the period of time that Northern Pump owned, or owned in part, the Fridley facility and leased it to Ordnance. FMC contends that Pump is potentially liable under CERCLA and that it must share the costs of cleaning up the Fridley facility pursuant to 42 U.S.C. § 9607(a)(4)(B). FMC also argues that Pump is liable under Article 12 of the 1963 Agreement, providing for indemnification, and under a claim for common law contribution. Pump contends that Articles Eleven and Twenty-two of the 1963 Agreement, and a release granted Pump by FMC in 1967 ("the Release" or "the 1967 Release"), released it from Ordnance's liability for disposing of hazardous waste. Further, Pump contends that only Ordnance disposed of hazardous wastes and that it did not participate in such disposal. Accordingly, it contends that it is not liable to FMC under its CERCLA claim, claim for indemnification under Article Twelve, or claim for contribution. Alternatively, Pump argues that FMC assumed Ordnance's liabilities, and therefore is precluded from suing Pump or that FMC is barred from suing Pump, under the doctrine of unclean hands.

ORDER

The Court finds for Pump and grants its motion for summary judgment on all of FMC's claims. Further, as Pump owes no monies to FMC, it will not seek damages from Ordnance. Accordingly, Ordnance's motion for summary judgment is denied.

DISCUSSION

Summary judgment is a drastic remedy, See, Buford v. Tremayne, 747 F.2d 445, 447 (8th Cir.1984); See also, Snell v. United States, 680 F.2d 545, 547 (8th Cir.), cert. denied, 459 U.S. 929, 103 S.Ct. 344, 74 L.Ed.2d 384 (1982). It is granted only if there is no genuine issue of material fact, and the movant is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The Court must view the facts in the light most favorable to the non-moving party. U.S. v. Advance Machine Co., 547 F.Supp. 1085, 1089 (D.C. Minn.1982). Further, the non-moving party is entitled to all reasonable inferences to be drawn from the facts disclosed in the pleadings and the evidence submitted to the Court. Kresse v. Home Insurance Co., 765 F.2d 753, 754 (8th Cir.1985). However, upon a properly supported motion, summary judgment is proper "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's cases and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

I.

Liability for the disposal of hazardous wastes is established under CERCLA which, in the words of Judge Magnuson of this Court, was enacted to address at least two congressional concerns.

First, Congress intended that the federal government be immediately given the tools necessary for a prompt and effective response to problems of national magnitude resulting from hazardous waste disposal. Second, Congress intended that those responsible for problems caused by the disposal of chemical poisons bear the costs and responsibility for remedying the harmful conditions they created.

United States v. Reilly Tar & Chemical Corp., 546 F.Supp. 1100, 1112 (D.Minn. 1982).

In relevant part, CERCLA provides that:

(1) the owner and operator of a vessel (otherwise subject to the jurisdiction of the United States) or a facility,

(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,

. . . . .

(4) ... shall be liable for —

(A) all costs of removal or remedial action incurred by the United States Government or a state not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan; and

(C) damages for injury to, destruction of, or loss of natural resources, including reasonable costs of assessing such injury, destruction, or loss resulting from such a release.

42 U.S.C. § 9607(a).

Accordingly, liability may be found under CERCLA extending to all potentially responsible parties. Further, courts have construed the standard of liability under CERCLA to be strict except where a defendant can rely on at least one of the three defenses specified in 42 U.S.C. § 9607(b). See, City of Philadelphia v. Stephan Chemical Co., 544 F.Supp. 1135, 1140 n. 4 (E.D.Penn.1982); United States v. Conservation Chemical Co., 619 F.Supp. 162, 204 (D.C.Mo.1985). However, a person that is liable under the terms of the Act may by agreement be held harmless or indemnified by another party. 42 U.S.C. § 9607(e)(1).

All three parties to these motions are potentially liable under CERCLA. Because FMC currently owns and operates the Fridley facility through its Northern Ordnance Division, FMC is potentially liable under CERCLA. 42 U.S.C. § 9607(a), see, State of New York v. Shore Realty Corp., 759 F.2d 1032, 1044 (2nd Cir.1985). Indeed, this potential liability provided the basis for FMC's execution of two Response Orders by Consent. Pump is a person¹ who owned the Fridley facility at the time hazardous wastes were disposed of there and it is potentially liable under CERCLA. See, State of New York, 759 F.2d at 1044. Ordnance² is a person who operated a facility at the time hazardous wastes were...