Gould Elecs. Inc. v. Livingston Cnty. Rd. Comm'n

• Decision Date: 19 November 2020
• Docket Number: Case No. 17-11130
• Parties: GOULD ELECTRONICS INC., Plaintiff, v. LIVINGSTON COUNTY ROAD COMMISSION, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

GOULD ELECTRONICS INC., Plaintiff, v. LIVINGSTON COUNTY ROAD COMMISSION, Defendant.

Case No. 17-11130

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

November 19, 2020

HON. MARK A. GOLDSMITH

OPINION & ORDER (1) CONTAINING FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING BENCH TRIAL; (2) DENYING PLAINTIFF'S MOTION IN LIMINE TO BAR TESTIMONY FROM DEFENDANT'S EXPERT (Dkt. 92); (3) GRANTING IN PART AND DENYING IN PART AS MOOT PLAINTIFF'S MOTION IN LIMINE (Dkt. 109); (4) DENYING AS MOOT PLAINTIFF'S PRETRIAL OBJECTIONS TO PROPOSED TRIAL EXHIBITS (Dkt. 135); AND (5) DENYING AS MOOT DEFENDANT'S PRETRIAL OBJECTIONS TO PROPOSED TRIAL EXHIBITS (Dkts. 148, 149, 150, 151, 152, 154)

TABLE OF CONTENTS

I. INTRODUCTION ............................................................................................................. 4

II. BACKGROUND ............................................................................................................... 6

A. The Properties & Historical Operations ............................................................................ 6

B. Discovery of TCE ................................................................................................................ 8

C. Expert Opinions ................................................................................................................ 10

D. LCRC's Petitions to EGLE ............................................................................................... 12

III. DISCUSSION .................................................................................................................. 14

A. Evidentiary Matters .......................................................................................................... 14

1. Travers's Testimony ..................................................................................................... 15

2. Feenstra's Testimony .................................................................................................... 16

3. Browning's Testimony .................................................................................................. 17

4. MSG Reports ................................................................................................................ 21

5. EGLE Records .............................................................................................................. 25

B. Final Administrative Action .............................................................................................. 30

C. Gould's CERCLA Cost Recovery Claim ........................................................................... 32

1. Prima Facie Case ........................................................................................................... 33

2. Statutory Defenses ........................................................................................................ 39

a. Third-Party Defense .................................................................................................. 39

i. Sole Cause ............................................................................................................... 40a) Historical Operations—RSF Facility ............................................................... 41

b) Floor Drain & PVC Pipe ................................................................................. 43

c) Historical Operations—LCRC Property .......................................................... 44

d) The Line of Occupation ................................................................................... 48

e) Travers's Theory .............................................................................................. 50

f) Rebuttal to Travers's Theory ........................................................................... 54

g) Feenstra's Theory ............................................................................................ 58

h) Rebuttal to Feenstra's Theory .......................................................................... 61

i) Grading & Excavation Activities .................................................................... 66

j) Conclusions Regarding Causation ................................................................... 67

ii. Due Care .............................................................................................................. 72

b. Contiguous Landowner Defense ............................................................................... 83

3. Divisibility .................................................................................................................... 84

D. LCRC's Contribution Counterclaims ............................................................................... 89

1. NREPA Contribution Counterclaim ............................................................................. 90

2. Gould's Liability ........................................................................................................... 91

3. Equitable Allocation ..................................................................................................... 95

a. Parties' Contributions ............................................................................................... 96

b. Parties' Degree of Care and Cooperation ............................................................... 100

c. Allocation of Response Costs ................................................................................. 103

IV. CONCLUSION ............................................................................................................. 107

I. INTRODUCTION

This is an environmental contamination case in which the parties dispute whether and how the costs of cleanup and remediation must be shared between them under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq., and under Michigan's Natural Resources and Environmental Protection Act ("NREPA"), Mich. Comp. Laws § 324.101, et seq. The Court conducted a seven-day non-jury trial between July 13, 2020, and July 21, 2020, by way of videoconferencing. The parties have submitted post-trial briefs and proposed findings of fact and conclusions of law, as well as responses to the post-trial briefing.

Plaintiff Gould Electronics, Inc. ("Gould") contends that Defendant Livingston County Road Commission ("LCRC") is responsible for contributing to a plume of trichloroethylene ("TCE") traversing the parties' adjacent properties and migrating northeast toward Thompson Lake in Howell, Michigan. Pl. Proposed Findings of Fact & Conclusions of Law ("PFFCL") at 5-9 (Dkt. 253). LCRC, in turn, maintains that Gould is solely responsible for the contamination. Def. PFFCL at 10 (Dkt. 252). Gould advances a cost recovery claim under CERCLA § 107(a), 42 U.S.C. § 9607(a), and seeks to hold LCRC strictly liable for the entirety of its response costs. See 3d Am. Compl. (Dkt. 76).¹ LCRC maintains that it is shielded from liability under the third-partydefense, CERCLA § 107(b)(3), 42 U.S.C. § 9607(b)(3), and under the contiguous landowner defense, CERCLA § 107(q), 42 U.S.C. § 9607(q). Def. PFFCL at 31-37. LCRC also argues that because the harm is divisible, it must be apportioned entirely to Gould. Id. Alternatively, LCRC advances contribution counterclaims under CERCLA § 113(f)(1), 42 U.S.C. § 9613(f), and under NREPA, Mich. Comp. Laws § 324.20129, seeking to equitably allocate all response costs, including its own, to Gould. Am. Counter-Compl. (Dkt. 118).

CERCLA is designed to promote timely cleanup of environmental hazards by requiring investigation and remediation of contamination—not just by those who actually degraded the environment through direct disposal of the contamination but also by landowners and certain other "responsible parties," regardless of whether they caused the toxic condition. The response costs incurred in conducting investigations and remediations may later be recovered, in whole or in part, from other responsible parties. For the reasons discussed below, the Court finds that Gould's corporate predecessor dumped vast quantities of waste chemicals, including TCE, onto the ground and into floor drains on its property over the course of fifteen years. These chemicals leached through the soils and groundwater and migrated onto neighboring properties, including LCRC's adjoining property. Although LCRC did not cause or contribute to the TCE contamination, it is liable as an owner of property where contamination is leaching through the soils and groundwater. And it fails to win the protection that CERCLA provides for innocent landowners because it was dilatory in investigating the source of the contamination and failed to fully cooperate with the state regulatory agency's efforts to investigate the site.

Under these circumstances, the Court finds in favor of Gould on its CERCLA cost recovery claim and holds that LCRC is strictly liable for Gould's response costs. However, the Court also finds in favor of LCRC on its CERCLA contribution counterclaim. Having considered theequities, the Court holds that Gould must bear the vast majority of the response costs, given that its corporate predecessor caused the toxic conditions. Accordingly, Gould's equitable share of its past and future response costs, as well as LCRC's past response costs, is fixed at 95%. Because LCRC engaged in delay tactics and was recalcitrant in cooperating with the state agency, it must bear 5% of the response costs. Finally, the Court dismisses LCRC's NREPA contribution counterclaim.

II. BACKGROUND

A. The Properties & Historical Operations

This case involves the determination of responsibility for costs associated with the investigation and remediation of TCE contaminating two adjacent parcels of land. One of the parcels, located at 325 North Roosevelt Street in Howell, Michigan, was owned and operated by non-party Gould Inc., one of Gould's corporate predecessors, from 1961 through 1976 (the ...