Gadsden Indus. Park, LLC v. United States, Case No. 4:15-cv-0956-JEO
| Decision Date | 03 October 2017 |
| Docket Number | Case No. 4:15-cv-0956-JEO |
| Parties | GADSDEN INDUSTRIAL PARK, LLC, Plaintiff, v. UNITED STATES OF AMERICA; CMC, INC.; and HARSCO COPORATION, Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
In this action, Plaintiff Gadsden Industrial Park, LLC ("GIP") has sued the United States under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671 et seq., and two government contractors, CMC, Inc. ("CMC") and Harsco Corporation ("Harsco") (hereinafter collectively "Defendants") under Alabama tort law. (Doc.1 27, Amended Complaint (hereinafter "Complaint" or "Compl."). The cause comes to be heard on two pending motions. The first is a joint motion filed by CMC and Harsco (collectively the "Contractors") in which they seek a dismissal or, in the alternative, a stay of the proceedings on the claims againstthem, based on an argument that GIP has engaged in improper claim-splitting. (Doc. 36 (incorporating Docs. 7 & 8)). In the other pending motion, the United States seeks a dismissal for lack of jurisdiction, based on the discretionary-function exception to the FTCA's waiver of sovereign immunity. (Doc. 37). The parties have exhaustively briefed the motions. (Docs. 45-47, 48-1, 50, 51, 54-55, 59, 61). Upon consideration, the court2 concludes that both motions to dismiss are due to be granted.
The salient allegations of the Complaint are these: Prior to the events giving rise to this lawsuit, a company known as Gulf States Steel, Inc. of Alabama ("Gulf States") owned and operated a 761-acre steel manufacturing facility in Gadsden, Alabama (the "Site"). (Compl. ¶ 11). In 1999, Gulf States filed for bankruptcy, and, in connection with that proceeding, various of its assets were sold off. (Id.) One such asset was a railroad track system installed on the Site, which was purchased in 2001 by the Williams Family Limited Partnership ("Williams"). (Id. ¶ 13). In 2002, Plaintiff GIP purchased other Gulf Statesassets, including about 434 acres of the Site real estate. (Id. ¶ 14). GIP also purchased other assets situated on an approximately 200-acre portion of the Site that GIP did not buy, an area of land the Complaint refers to as the "Excluded Real Property." (Id. ¶¶ 15, 16). In particular, GIP purchased all of the "kish" as well as 420,000 cubic yards of "slag" located on the Excluded Real Property. (Compl. ¶ 16). Kish is a by-product of the steelmaking process and contains recyclable metal particulates, while slag is the unrefined result of the first step of the steelmaking process. (Id. ¶ 17). Both had been "dumped and/or stockpiled" at various locations on the Excluded Real Property during the approximately 97-year period that Gulf States and its predecessors used the Site for metal manufacturing. (Id.)
After GIP's purchase, it partnered with Williams to operate a railroad car storage business on the Site, using the tracks that Williams had bought. (Id. ¶ 18). That partnership later dissolved, and Williams sold the entire track system to GIP in 2005. (Id. ¶ 19). After refurbishing parts of the system and purchasing locomotives, GIP commenced running its own railroad car storage business on the Site in January 2008. (Compl. ¶ 21).
In 2007 or 2008, however, the United States Environmental Protection Agency ("EPA") began remedial work on the Excluded Real Property as part of a "Superfund" site project under the Comprehensive Environmental Response,Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9657 (Id. ¶ 23). In undertaking that operation, the EPA barred GIP from entering the Excluded Real Property, thereby preventing it from using any of the rail spur lines located thereupon. (Id. ¶ 24). Further, although GIP says that it "had been making preparations" to retrieve and sell its kish on the Excluded Real Property (id. ¶ 31), the EPA's denial of access also prevented GIP from carrying out such plans. (Id. ¶¶ 24, 31, 36).
In about 2007, the EPA hired Defendant CMC to be its "emergency response contractor and/or site manager at the Site." (Compl. ¶ 25). In about 2008, the EPA, by and through CMC, hired Defendant Harsco to conduct a pilot study of the materials located on an eight-acre portion of a "non-hazardous permitted landfill situated on the Excluded Real Property, for the sole purpose of determining whether and to what extent those materials contained valuable metal-bearing items that could be marketed and resold for profit." (Id. ¶ 26). After that study concluded that mining portions of the Excluded Real Property for recyclable metals would be profitable, the EPA, again acting by and through CMC, hired Harsco in October 2009 to conduct a full-scale "slag processing" operation, pursuant to which Harsco agreed to mine the eight-acre portion of the Excluded Real Property for the purpose of extracting and selling valuable metal-bearingmaterials. (Id. ¶¶ 28, 29). In return, Harsco would remit a percentage of the gross proceeds from such sales to CMC, which, in turn, would credit the EPA for amounts it otherwise owed on the project to CMC. (Id.) Pursuant to that agreement, from early 2010 through sometime in 2013, Harsco proceeded to mine, process, market, and sell to third parties "many, many millions of dollars" worth of metal-bearing materials from the kish and slag that GIP had purchased out of the Gulf States bankruptcy. (Id. ¶¶ 30, 32, 33, 34). Harsco did not, however, limit those efforts to the eight-acre portion of the parcel originally agreed upon, nor to only the non-hazardous permitted landfill portions of the Excluded Real Property. (Compl. ¶ 33). Rather, GIP maintains, with the knowledge and approval of the EPA and CMC, Harsco mined the Excluded Real Property wherever it determined metallic items of value existed. (Id. ¶ 34). And despite the fact that Defendants were at all times aware of GIP's claimed interest in the kish and slag, they continued to prohibit GIP from itself retrieving and selling them. (Id. ¶¶ 32, 35, 36).
In addition, GIP alleges that "during the course of its work mining for 'kish,' [the Contractors,] with the EPA's knowledge and approval, also uninstalled, cut, severed, tore up from the ground, and removed roughly 1,400 feet of track [on the HS-1 and HS-2 spur lines] owned by [GIP] on the [Excluded RealProperty, along with all accompanying ties, plates, spikes, and the like." (Id. ¶ 37). Defendants then discarded those materials "and/or" sold them to third parties. (Id. ¶ 38). Similarly, GIP claims that the EPA, by and through the Contractors or other employees or agents, "completely covered" another 1,000 feet of track on the HN-1 spur line owned by GIP on the Excluded Real Property with "non-saleable mined material," thereby rendering those tracks unusable. (Compl. ¶ 39). GIP ultimately insists that "no condition existed at the Site which would have authorized, necessitated or required the Defendants under CERCLA to have removed [GIP]'s property, ... to have covered or discarded [GIP's] property and/or to have conveyed it to third parties." (Id. ¶ 42). Despite numerous demands by GIP, neither the EPA nor the Contractors have remitted any compensation to GIP for the destruction or removal of its property at the Site. (Id. ¶ 43; see also Docs. 27-1, 27-2, 27-3).
GIP filed this action on June 5, 2015. (Doc. 1). In its now-governing amended pleading filed in August 2015, GIP brings claims under the FTCA and Alabama tort law against Defendants, set forth in four counts. (Doc. 27, Compl.). Count I alleges that all three Defendants are liable for conversion of GIP's kish and slag located on the Excluded Real Property, while Count II similarly alleges that those Defendants acted negligently by "removing, destroying, discardingand/or selling" same. Counts III and IV assert that the United States, but not either of the Contractors, is also liable for conversion and negligence, respectively, based upon the removal and burial of the aforementioned sections of railroad track on the Excluded Real Property.
In support of its pending motion to dismiss, the United States has filed an affidavit sworn by Terrence Byrd, an "On-Scene Coordinator" in the EPA's "Superfund Division." (Doc. 37-2 ("Bryd Aff.") ¶¶ 1, 3). In his affidavit, Byrd recites the following: The EPA designated the Gulf States Site as a Superfund removal site in 2001 when it initiated an investigation there and that associated removal operations began in 2003 and concluded in 2013. (Byrd Aff. ¶ 5). The site had "two large waste piles" that "contained certain hazardous substances that were leaching into the ground, nearby water sources, and the sediments of Black Creek and Lake Gadsden." (Id. ¶ 6). In response, the "EPA sought a way to remove the hazardous substances and decrease the volume of the waste piles to lessen the environmental impact." (Id.)
Byrd's affidavit also contains a number of allegations that confirm or are otherwise generally consistent with those GIP pleads in its Complaint. According to Byrd, CMC, as the project manager hired by the EPA, offered several options for proceeding, including by "recycling the metallic content of the waste piles."(Id. ¶ 7). CMC then hired Harsco to conduct a pilot study, based upon which "Harsco determined that the waste material would yield sufficient metal content to make processing the material from an engineering and economic standpoint." (Id. ¶ 9). That study, Byrd says, "also demonstrated to EPA that removal of the metallics would reduce the volume, toxicity, and mobility of the hazardous substances in the waste piles and was more cost effective that the other removal alternatives considered." (Byrd Aff. ¶ 10). Harsco then entered into a subcontract with CMC, under which the former would conduct the removal operation, extract metallic content from the waste piles, sell it, and pay CMC a royalty that would be credited against amounts the EPA owed to CMC on the project. (Id. ¶ 11).
Finally, Byrd's...
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