General Elec. Co. v. Litton Indus. Automation Systems, Inc.

• Decision Date: 12 December 1990
• Docket Number: No. 89-2845,89-2845
• Citation: 920 F.2d 1415
• Parties: , 59 USLW 2396, 21 Envtl. L. Rep. 20,453 GENERAL ELECTRIC COMPANY, Appellee, v. LITTON INDUSTRIAL AUTOMATION SYSTEMS, INC. and Litton Industries, Inc., Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1415

920 F.2d 1415

32 ERC 1433, 59 USLW 2396, 21 Envtl.

L. Rep. 20,453

GENERAL ELECTRIC COMPANY, Appellee, v. LITTON INDUSTRIAL AUTOMATION SYSTEMS, INC. and Litton

Industries, Inc., Appellants.

No. 89-2845.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 8, 1990.

Decided Dec. 12, 1990.

Bruce W. Kauffman, Philadelphia, Pa., for appellants.

James L. Moeller, Kansas City, Mo., for appellee.

Before BOWMAN, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and WOLLMAN, Circuit Judge.

BOWMAN, Circuit Judge.

This is an action brought by General Electric ("GE") pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, Sec. 107(a), 42 U.S.C. Sec. 9607(a) (1988). The District Court ¹ ordered Litton to pay GE for certain cleanup costs incurred by GE and also ruled that GE was entitled to recover its attorney fees. Litton appeals. For the reasons set forth below, we affirm.

I.

In 1959, Royal McBee Corporation opened a typewriter plant on a forty-acre plot in Springfield, Missouri. ² From 1959 to 1962, Royal McBee dumped cyanide-based electroplating wastes, sludge, and other pollutants onto part of the forty-acre tract. Over time, these wastes migrated from the original dumping location, contaminating a larger area of land.

In 1965, Royal McBee merged with Litton Industries, Inc., and Litton became the surviving corporation. ³ The typewriter plant was closed in 1969, and in 1970 GE bought the plant and the surrounding land. In 1980, the Missouri Department of Natural Resources ("MDNR") learned of the hazardous substances that had been dumped at the site and GE was notified. The MDNR and GE concluded in 1981 that there was no potential for groundwater contamination, and performed no cleanup work at the site.

In 1984, GE agreed to sell the vacant nineteen acres at the site (where the dumping had occurred) to Enterprise Park, a real estate concern that intended to develop the property for commercial purposes. In July 1985 the MDNR changed course and decided to propose that the site be placed on Missouri's Registry of Abandoned and Uncontrolled Hazardous Waste Sites of Missouri. GE appealed this proposed registry, while Enterprise Park notified both GE and Litton of potential CERCLA claims. On three separate occasions from September 1985 to March 1986, the Missouri Hazardous Waste Commission held public meetings to discuss, among other things, the proposed registry of the GE site. In October 1985, the Missouri Department of Health ("MDOH") stated that the contaminants in the soil at the site posed "a significant health threat and ... should be removed." Appellants' Appendix, vol. VIII, Sec. 58, at 1861.

During that same month, GE hired OH Materials Company to investigate the site and conduct any response actions deemed necessary. In December 1985, the Environmental Protection Agency ("EPA") decided that Missouri should take enforcement action for the site and stated that the 1981 MDNR findings, in light of improved scientific knowledge, were erroneous. On December 16, 1985, GE and Enterprise Park entered into a Settlement Agreement. The Agreement essentially held GE liable for any cleanup costs incurred at the site and called for GE to attempt to keep the site off the Registry.

In late 1985 and early 1986 GE, the MDNR, and Enterprise Park negotiated a Consent Decree. The Decree called for the development and implementation of a cleanup plan for the site. It required any cleanup action to be consistent with the National Contingency Plan ("NCP"), EPA Superfund Programs, 400 CFR Sec. 300 et seq. (1986), and required MDNR approval of all action.

Pursuant to their site investigation, OH Materials produced an analysis of several possible cleanup actions. Although the most expensive alternative, excavation was chosen as the best and most effective response action. Excavation began on October 13, 1986. On that day, three large drums were discovered buried at the site. Shortly thereafter, a trench was discovered, along with a fourth drum. This drum contained extremely hazardous substances. Excavation continued until December 7, 1986, when work was halted pending further site analysis. More excavation was performed in May 1987 and the cleanup was completed in December 1987.

Most of the soil was disposed of as a nonhazardous waste, minimizing cleanup costs. The drums and the more-contaminated soil were disposed of as hazardous wastes. In early 1988 the MDNR approved the cleanup of the site, withdrew the proposed registry, and stated that the site had been properly cleaned.

Even though Litton had been notified by both GE and Enterprise Park in 1985 about its potential CERCLA liability, Litton never participated in any of the investigation, evaluation, or cleanup of the site. In March 1987, while the cleanup was still in progress, GE made a formal demand on Litton asking it to indemnify GE for the cleanup costs. In June 1987 GE filed suit, seeking to recover its response costs for cleaning up the site. In August 1988 GE filed an amended complaint, seeking to recover its cleanup costs pursuant to Sec. 107(a) of CERCLA, 42 U.S.C. Sec. 9607(a).

Following a four-day bench trial in May 1989, the District Court found that there had been a release of hazardous substances, that Litton was responsible for the release, that GE's response was necessary, and that GE's cleanup actions met the provisions of CERCLA and the NCP. The District Court ordered Litton to pay GE more than $940,000 as reimbursement for the response costs incurred. The District Court also ruled that attorney fees were recoverable, and ordered Litton to pay GE more than $419,000 in attorney fees and expenses.

On appeal, Litton claims that 1) GE should not be allowed to recover its cleanup costs because the cleanup was induced by the threat of a lawsuit; 2) GE's response was not consistent with the NCP; 3) the District Court erred in not apportioning some of the response costs to GE; and 4) the District Court erred in allowing GE to recover its attorney fees.

II.

42 U.S.C. Sec. 9607(a) holds the party responsible for a hazardous substance release liable for cleanup costs incurred as a result of the release. It allows a private party who incurs such costs to recoup its cleanup expenses from the responsible party. 42 U.S.C. Sec. 9607(a)(4)(B). In order for a private party to recover these costs from the responsible party, the release of hazardous substances must have "caused" the incurrence of the costs. Litton claims that a release of pollutants did not "cause" GE's response, but rather, the threat of a lawsuit "caused" GE's response.

Although couched in terms of causation, this argument is really an "unclean hands" defense to GE's CERCLA claim. Litton asserts that GE failed to tell Enterprise Park of the known contaminants at the site when it sold the property to Enterprise Park in 1984, even though GE knew of the problem by 1980 at the latest. Litton claims that only after Enterprise Park found out about the contaminants, and threatened GE with a lawsuit, did GE begin its response. Therefore, according to Litton, the response was "caused" by GE's reaction to the possible lawsuit, not by the release of pollutants.

This argument is without merit. CERCLA is a strict liability statute, with only a limited number of statutorily-defined defenses available. United States v. Aceto Agric. Chem. Corp., 872 F.2d 1373, 1377-78 (8th Cir.1989); State of New York v. Shore Realty Corp., 759 F.2d 1032, 1042 (2nd Cir.1985). The available defenses are that the release was caused solely by an "act of God [or] war," or that the release was caused solely by a third party whose actions were not foreseeable by the defendant, who was exercising due care with respect to the hazardous substance. 42 U.S.C. Sec. 9607(b). The third party must not be an employee or agent of the defendant, nor have entered into a contractual relationship with the defendant. 42 U.S.C. Sec. 9607(b). CERCLA does not provide for an "unclean hands" defense; the liability imposed by 42 U.S.C. Sec. 9607(a) is subject only to the defenses noted above. Thus, the motives of the private party attempting to recoup response costs under 42 U.S.C. Sec. 9607(a)(4)(B) are irrelevant. The purpose of allowing a private party to recover its response costs is to encourage timely cleanup of hazardous waste sites. This purpose would be frustrated if a plaintiff's motives were subject to question. We will not look at the impetus behind a plaintiff's decision to begin the cleanup process; we will look only to see if there has been a release or threatened release for which the defendant is responsible. 42 U.S.C. Sec. 9607(a). Undoubtedly such a release occurred at the site. As found by the District Court, "(f)rom 1958 to 1963, [the] defendant dumped 500 gallons per year of waste chemicals on the ground in question. Additionally, ... a trench was used to bury a barrel which contained ... toxic material." General Elec. Co. v. Litton Business Sys., Inc., 715 F.Supp. 949, 957 (W.D.Mo.1989). GE's response was "caused" by Litton's release, and therefore meets this criterion of CERCLA.

III.

Litton next argues that the mandate of 42 U.S.C. Sec. 9607(a)(4)(B), that the response be "consistent with the national contingency plan," was not met by GE. This section allows a private party to recover its response costs from the responsible party only if the response was necessary and consistent with the NCP. 40 CFR Sec. 300.71, entitled "Other Party Responses," details the response actions that are considered to be consistent with the NCP. If the response is characterized as a removal action, then it must be taken in circumstances warranting removal and be consistent with 40 CFR Sec. 300.65. If the response is deemed to be a remedial action, then it must be consistent with 40 CFR Sec. 300.68, as well as be cost-effective and provide for public comment, or a substantially...