GJ Leasing Co., Inc. v. Union Elec. Co., Civ. No. 91-158-JPG.
| Decision Date | 06 June 1994 |
| Docket Number | Civ. No. 91-158-JPG. |
| Parties | G.J. LEASING CO., INC., d/b/a Cahokia Marine Service, Slay Transportation Co., Inc., S.I. Warehousing Co., Inc., d/b/a Bi-State Warehousing, and S.I. Enterprises, L.P., Plaintiffs, v. UNION ELECTRIC CO., Defendant. |
| Court | U.S. District Court — Southern District of Illinois |
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Joseph G. Nassif, Ronald L. Hack, Linda Tape, Coburn & Croft, St. Louis, MO, for plaintiffs.
Paul Venker, Edwin Noel, Susan Knowles, Armstrong, Teasdale, Schlafly & Davis, St. Louis, MO, for defendant.
This matter is before the Court following a bench trial on the plaintiffs', G.J. Leasing Company, Inc., d/b/a Cahokia Marine Service, and S.I. Enterprises, L.P., claim against the defendant, Union Electric, seeking damages for violations of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. The relief sought by the plaintiffs include damages equalling the plaintiffs' response costs incurred as a result of the release or threatened release of hazardous substances at the Site, plus interest, as well as attorney's fees and costs; and a declaratory judgment in the plaintiffs' favor and against Union Electric ("U.E.") holding that U.E. is liable for all response costs to be incurred by the plaintiffs in the future. The plaintiffs also seek damages in Count IV, an ultrahazardous activity claim, which alleges that U.E.'s disposal of hazardous substances through the sale of the Sauget Site for the purpose of demolition was an abnormally dangerous and ultrahazardous activity.1 This Court has jurisdiction pursuant to 28 U.S.C. § 1331 and 42 U.S.C. § 9601 et seq. After considering the testimony, exhibits, arguments of counsel, and supporting memoranda, the Court makes the following Findings of Fact and Conclusions of Law pursuant to Federal Rule of Civil Procedure 52(a).
The following facts have been stipulated to by the parties:
1. The plaintiff, S.I. Enterprises, L.P. is a Missouri limited partnership.
2. The plaintiff G.J. Leasing Company, Inc., d/b/a Cahokia Marine Service ("CMS") is a Missouri corporation.
3. The defendant, Union Electric ("U.E.") is a Missouri corporation.
4. U.E. owned a power generating facility on property located at # 1 Monsanto Avenue in Sauget, Illinois from 1923 until 1979.
5. The electric generating equipment was located in the power plant.
6. On December 21, 1978, U.E. entered into an executory contract with G & S for the sale of the Site along with certain of its equipment.
7. The sale was contingent upon U.E. obtaining consent of the Illinois Commerce Commission ("ICC").
8. On March 29, 1979, Slay Warehousing Co., Inc., a Missouri corporation, entered into a Letter of Intent with G & S Sarnelli, for the purchase of the Sauget Site. Pursuant to the Letter of Intent, G & S and Sarnelli were to sell the real estate to Slay Warehousing and were to retain the right to remove for salvage those materials that were not necessary for the operation of a tank farm and trucking operation.
9. Sometime after April 23, 1979, and before May 29, 1979, Slay Warehousing assigned its rights in the real estate contract to Eugene P. Slay and Joan Slay.
10. On May 29, 1979, U.E. sold the property to G & S for nearly $1.6 million. On the same day, G & S sold the property for $1,000,000.00 to Eugene and Joan Slay. All property was sold "as is."
11. On or about February 3, 1988, the Slays transferred the Cahokia Site to S.I. Enterprises, L.P. by warranty deed.
The following facts are findings made by this Court:
1. Eugene Slay is the Chief Executive Officer of all the plaintiff entities. He, together with members of his family, own and control all of the plaintiff entities. Slay Industries is the umbrella organization for the plaintiff entities. (Testimony of E. Slay).
2. Mr. Slay began his career working for his father's business, Bee Line Trucking, which specialized in local transportation and delivery services. Eventually, Slay expanded his father's operations into tankage, trucking, barging and warehousing. (Testimony of E. Slay). Judge Paul Simon, Mr. Slay's long time attorney, described Eugene Slay as a sophisticated and knowledgeable businessman. Slay's companies have stored and transported a variety of other hazardous substances over the years, including such materials as caustic potash, ammonium nitrate, benzene and sulfuric acid. (Testimony of Glen Slay).
3. It is Mr. Slay's practice to rely on certain key employees, such as Ted Tahan, Paul Simon, and Ray Stratmeyer, in managing the day to day operation of his enterprise. (Testimony of E. Slay). These employees are also knowledgeable and experienced businessmen.
4. For more than fifty years, U.E. generated electricity at its Cahokia Power Plant located on a 52 acre tract along the eastern bank of the Mississippi River in Sauget, Illinois. The predominant land use in the area surrounding the Site is industry, including chemical processing and toxic waste processing. (Defendant Exh.FD). However, some of the Site's other neighbors include nightclub establishments with numerous patrons and employees.
5. The Court agrees with the plaintiffs' expert David Schau's testimony that, based upon his review of various U.E. health and safety documents, U.E. appeared at all times to comply with OSHA regulations regarding worker exposure. Schau further testified that he saw no evidence that U.E. violated NESHAP or OSHA regulations during its ownership of the Site. (Testimony of D. Schau).
6. U.E. knew asbestos fibers were hazardous to worker health and undertook two asbestos surveys in 1973, of Cahokia employees who had to work with asbestos. (Plaintiffs' Exh. 8). U.E. knew, as a result of these surveys, that any handling of asbestos could cause exposures above levels set by the government. U.E. also knew that the protective gear worn by workers and methods to control releases (such as spraying water) were ineffective, under conditions where dust was prevalent, in reducing asbestos exposure to a safe level. (Plaintiffs' Exh. 8).
7. During the plant's operation, U.E. was meticulous about the condition of its plant, its cleanliness and its repair. As a matter of corporate policy, U.E. imposed strict maintenance requirements on its facilities. (Testimony of R. Weidenbenner; E. Dille). Insulation on pipes was always well maintained and was loose only during repair. Transite boards were always intact and "somebody would have gotten fired" if the plant was left in a disheveled condition. (Testimony of R. Carter; R. Weidenbenner). Similarly, equipment was serviced regularly and in such a manner as to minimize damage to the equipment or the facility.
8. The buildings on the Site include a large power plant used at one time by U.E. to generate electricity, several large aboveground storage tanks, four underground storage tanks, a warehouse, a truck maintenance facility, and an office building. The power plant is partially built out into the Mississippi River.
9. The power plant is divided into three sections — the boiler, the turbine room, and the river bay. There were 24 boilers in the plant and six turbine generators. The turbine generators and boilers were fixed and bolted in place. (Testimony of R. Carter, R. Weidenbenner, C. Kind, M. Gatewood).
10. Without repeating all of the testimony regarding all of the systems in the plant, the Court finds the following to be an accurate description of the systems in the power plant. There were two precipitator systems located on the roof of the building which had been out of use since 1972, when the plant converted from coal to oil. There were transformers located both inside the building and on the outside deck of the river bay. The exterior transformers transported power under the Mississippi River and to the eastern shore of Missouri through submarine cables. All of the transformers contained heat transfer oils, but with the exception of two transformers on the roof relating to the precipitator system and two pole mounted transformers which were installed by U.E. during its plant decommissioning, none of the transformers were contaminated with polychlorinated biphenyls (PCBs). (Testimony of R. Carter) (Defendant's Exh. CX). There were valves in the areas of the power plant which were below water level, which prevented flooding into the plant. (Testimony of R. Carter). Sump pumps also prevented water from collecting in the lower levels of the basement. (Testimony of P. Brendel). There were also numerous wires, connectors, and other electrical equipment, including long copper buss-bars which transported electrical current from the generators to the transformers for distribution within the U.E. system. Some of this electrical equipment also contained non-PCB contaminated heat transfer fluids.
11. Because heat was generated in the production of electricity, it was common for power plants to contain insulating materials throughout the plant to protect workers and to save heat loss. This insulation would appear on duct work, steam lines, buss-bars, as well as within large pieces of electrical equipment. In the Cahokia plant, as was common with other power plants, much of this insulation contained asbestos. In addition, floor tiles, roofing materials, fire brick, pipe insulation and transite boards were manufactured with asbestos containing material, and were found throughout the Cahokia facility. (Testimony of R. Carter; R. Weidenbenner).
12. When Cahokia was built, it was the principal base load electrical generating plant which carried power throughout the entire U.E. system. After the Labadie and Rush Island Power Plants became operational, however, Cahokia was used for peak period only. (Testimony of R. Baudendistel). By 1975, Cahokia had become the...
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