Greene v. Product Mfg. Corp.

• Decision Date: 28 December 1993
• Docket Number: Civ. A. No. 91-1402-MLB.
• Citation: 842 F. Supp. 1321
• Parties: Jack E. GREENE, et al., Plaintiffs, v. PRODUCT MANUFACTURING CORPORATION, Defendant.
• Court: U.S. District Court — District of Kansas

842 F. Supp. 1321

Jack E. GREENE, et al., Plaintiffs, v. PRODUCT MANUFACTURING CORPORATION, Defendant.

Civ. A. No. 91-1402-MLB.

United States District Court, D. Kansas.

December 28, 1993.

Brian G. Grace, Jana C. Werner, Grace, Unruh & Pratt, Wichita, KS, Randall K. Rathbun, Office of U.S. Atty., Wichita, KS, for plaintiffs.

David G. Seely, Stephen M. Stark, Fleeson, Gooing, Coulson & Kitch, L.L.C., Wichita, KS, for defendant.

MEMORANDUM AND ORDER

BELOT, District Judge.

This case comes before the court on Product Manufacturing Corporation's (PMC) motion for summary judgment, pursuant to Fed. R.Civ.P. 56. (Doc. 74) The plaintiffs brought this action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)¹ seeking to recover response costs incurred in cleaning up groundwater pollution at a site in Wichita, Kansas.

From approximately 1970 through August 1988, PMC conducted a metal fabrication business at 4225 Bounous, an industrialized area of Wichita, Kansas. Prior to July, 1978, plaintiffs were the only stockholders of PMC. On July 28, 1978, PMC leased the property from the plaintiffs and occupied it to conduct its manufacturing business. Throughout the period of its operations at 4225 Bounous, PMC used solvents containing trichloroethylene (TCE) to degrease metal parts. TCE is a solvent commonly used in the metal fabrication business.

The Kansas Department of Health and Environment (KDHE) investigated the site and determined it was a source of groundwater contamination. The KDHE determined that a removal action was necessary to abate the pollution threat.²

Plaintiffs filed this private party cost recovery action on September 25, 1991. In the interim period following commencement of this suit, the plaintiffs conducted negotiations with KDHE and entered into a consent order with KDHE in March, 1993. Under the terms of the consent order, the plaintiffs agreed to carry out a removal action under the oversight of KDHE. The United States Environmental Protection Agency (EPA) is not a party to the consent order.

Standards for Summary Judgment

Rule 56(c) of the Federal Rules of Civil Procedure directs the entry of summary judgment in favor of the party who "shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." A principal purpose "of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses...." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The court's inquiry is to determine "whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). "Entry of summary judgment is mandated, after an adequate time for discovery and upon motion, against a party who `fails to make a showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Aldrich Enters., Inc. v. United States, 938 F.2d 1134, 1138 (10th Cir.1991) (quoting Celotex, 477 U.S. at 322, 106 S.Ct. at 2552). Summary judgment is inappropriate, however, if there is sufficient evidence on which a trier of fact could reasonably find for the nonmoving party. Prenalta Corp. v. Colorado Interstate Gas Co., 944 F.2d 677, 684 (10th Cir.1991).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact by informing the court of the basis for its motion. Martin v. Nannie and the Newborns, Inc., 3 F.3d 1410, 1414 (10th Cir.1993). This burden, however, does not require the moving party to "support its motion with affidavits or other similar materials negating the opponent's claim." Id. (emphasis in original). Once the moving party properly supports its motion, the nonmoving party "may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Muck v. United States, 3 F.3d 1378, 1380 (10th Cir.1993). The court reviews the evidence in a light most favorable to the nonmoving party, e.g., Thrasher v. B & B Chemical Co., Inc., 2 F.3d 995, 996 (10th Cir.1993), under the substantive law and the evidentiary burden applicable to the particular claim. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513.

Attorney's Fees

CERCLA was enacted in 1980 to facilitate the cleanup of leaking hazardous waste disposal sites. Exxon Corp. v. Hunt, 475 U.S. 355, 359-60, 106 S.Ct. 1103, 1108, 89 L.Ed.2d 364 (1986). One of its provisions allows both government and private parties to recover from responsible parties the costs incurred in cleaning up and responding to hazardous substances at abandoned and inactive waste disposal sites. 42 U.S.C. § 9607(a).

To state a claim under 42 U.S.C. § 9607(a), a plaintiff must allege that: (1) the defendant is a "covered person" within the meaning of the Act; (2) a "release" or "threatened release" of any "hazardous substance" from the site in question has occurred; (3) the release or threatened release caused plaintiff to incur costs; (4) plaintiff's costs are "necessary" costs of response; and (5) plaintiff's response actions were consistent with the National Contingency Plan (NCP). Reading Co. v. City of Philadelphia, 823 F.Supp. 1218, 1227-28 (E.D.Pa.1993).

Plaintiffs seek to recover attorneys fees as a necessary cost of response under CERCLA. The Tenth Circuit recently addressed this issue and held that a private party may not recover attorneys fees arising from the litigation of a private recovery action under CERCLA. FMC Corporation v. Aero Industries, Inc., 998 F.2d 842, 847 (10th Cir.1993). However, the court also held that recovery of nonlitigation attorneys fees was not precluded. Id. The court gave examples of fees that may fall under the latter category. These included fees generated in designing and negotiating the removal action and preparing and carrying out the work plan approved by the government, fees incurred for negotiating and drafting contracts with environmental professionals who performed the removal work, negotiating changes to the work plan, and monitoring work progress. Id. at 848.

FMC Corp. governs the court's decision. Accordingly, the court holds that plaintiffs cannot recover attorneys fees incurred in litigating the recovery action, but may seek to recover reasonable and necessary attorneys fees for removal-related nonlitigation activities.

Notice

PMC argues that plaintiffs failed to timely provide notice to the EPA and the Attorney General as required by 42 U.S.C. § 9613(l).³ The EPA has interpreted the notice provisions of the statute to require concurrent notice. 55 Fed.Reg. 8798 (March 8, 1990). Plaintiffs' counsel filed the required notice on February 17, 1993, nearly a year and a half after the lawsuit was filed.⁴

The court is unable to locate any authority discussing the legal effect of a failure to provide timely notice. PMC suggests the appropriate sanction for plaintiffs' delay in giving the required notice should be either dismissal with prejudice or dismissal until the EPA is given time to conduct an investigation. The court views PMC's suggested sanction as overly harsh. The appropriate inquiry, in our judgment, is whether the plaintiffs' failure to provide timely notice caused prejudice to PMC. On the record before us, the court cannot say whether it has or has not. The EPA thus far has not attempted to intervene in this cleanup action, despite having notice. The affidavit submitted by plaintiffs' attorney⁵ indicates that "based on past assurances from employees of the EPA" he believes the EPA will not intervene in this case. PMC counters, without citation to authority or evidence, that plaintiffs' failure to notify EPA could expose PMC to double liability. Both of these statements are slim reeds upon which to base summary judgment. The court directs that the parties depose an EPA employee with the authority to settle the issue of the EPA's involvement, if any, and the correlative issue of PMC's potential exposure to double liability. The deposition shall be taken within 30 days of this order.

Under these circumstances, the court declines to grant summary judgment on the basis of the plaintiff's failure to timely comply with § 9613(l).

Consistency with the NCP

PMC argues the plaintiffs have failed to demonstrate "consistency" with the NCP and asks the court to dismiss the plaintiffs' claims for past and future response costs. In the alternative, PMC contends that any judgment for such costs should be held in abeyance until plaintiffs present evidence of their compliance with the NCP.

The NCP is a set of regulations promulgated by the EPA that "establishes procedures and standards for responding to releases of hazardous substances." County Line Inv. Co. v. Tinney, 933 F.2d 1508, 1511 (10th Cir.1991) (Citations omitted). Its purpose "is to give some consistency and cohesiveness to response planning and actions." Bunger v. Hartman, 797 F.Supp. 968, 973 (S.D.Fla. 1992) (Citation omitted).

In 1990, the EPA revised the NCP and its provisions for determining the consistency of private party response actions.⁶See 55 Fed.Reg. 8666 (1990). The EPA now considers a private party response action "consistent" with the NCP if the action is in substantial compliance with the applicable requirements and results in a CERCLA-quality cleanup. Tinney, 933 F.2d at 1514 (citing 40 C.F.R. § 300.700(c)(3)(i)).⁷ The burden of proof to establish compliance with the NCP by a preponderance of the evidence rests with the plaintiffs. Id. n. 10.

PMC argues that the plaintiffs have barely scratched the surface in terms of the scope of their investigation and remediation of...