Harris v. Oil Reclaiming Co.
| Decision Date | 11 April 2000 |
| Docket Number | No. 97-1270-JTM.,97-1270-JTM. |
| Citation | 94 F.Supp.2d 1210 |
| Parties | Orpha Glee HARRIS, et al., Plaintiffs, v. OIL RECLAIMING COMPANY, et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
John S. Seeber, Adams & Jones, Chartered, Wichita, KS, for Orpha Glee Harris, Loree Beeler, Galen Young, Avis Jean Thompson.
George Nelson, Oklahoma City, OK, Edward L. Brown, Jr., Wichita, KS, James A. Choate, George Nelson, P.C., Oklahoma City, OK, Chris H. Eulberg, Eulberg Law Offices, Oklahoma City, OK, for Bill Harrison.
James O Moody, Oklahoma City, OK, pro se.
The plaintiffs in the present action are lessors of land containing an oil reclaiming plant in Stafford County, Kansas. They have brought the present action against the lessee (Oil Reclaiming Company, Ltd.); its general partner (Oil Reclaiming Company, Inc.), and several officers of the general partner. Many of the defendants have defaulted or otherwise failed to defend the action. Trial was begun on April 5, 2000 against one individual defendant, Bill Harrison, the former Vice-President of Oil Reclaiming Company, Inc.
Following the conclusion of the plaintiffs' evidence, the defendant Harrison moved for a judgment as a matter of law pursuant to Fed.R.Civ.Pr. 50. Viewing all of the evidence in the light most favorable to the plaintiffs, the court determined that Harrison's motion should be granted. Accordingly, for the reasons stated from the bench, and as further set out herein, the court grants the defendant's motion.
Fed.R.Civ.Pr. 50(a)(1) provides:
If during a trial by jury a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue, the court may determine the issue against that party and may grant a motion for judgment as a matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue.
Judgment as a matter of law is appropriate under Rule 50(b) "only if the evidence, viewed in the light most favorable to the nonmoving party, points `but one way and is susceptible to no reasonable inferences supporting' the nonmoving party." Riggs v. Scrivner, Inc., 927 F.2d 1146, 1149 (10th Cir.) (quoting Zimmerman v. First Fed. Sav. & Loan Ass'n, 848 F.2d 1047, 1051 (10th Cir.1988)), cert. denied, 502 U.S. 867, 112 S.Ct. 196, 116 L.Ed.2d 156 (1991). Judgment as a matter of law is proper "only if the proof is all one way or so overwhelmingly preponderant in favor of the movant as to permit no other rational conclusion." J.I. Case Credit Corp. v. Crites, 851 F.2d 309, 311 (10th Cir.1988). See also Zuchel v. City and County of Denver, Colorado, 997 F.2d 730, 734 (10th Cir.1993). "A reviewing court is not permitted to consider the credibility of witnesses in reaching its decision ... nor may a court weigh the evidence or determine where the preponderance of the evidence lies." Zuchel, 997 F.2d at 734 (internal quotations omitted). Judgment under Rule 50 "should be cautiously and sparingly granted." Lucas v. Dover Corp., 857 F.2d 1397, 1400 (10th Cir.1988).
The plaintiffs have brought two claims against Harrison. First, that he is responsible for spills at the reclaiming plant under the Oil Pollution Act (OPA), 33 U.S.C. § 2701 et seq. (1990), and second, that he was a party to the lease, which contains a provision specifically obligating the lessee to clean up the property upon termination of the lease.
The claim under the OPA fails because the evidence, read in the light most favorable to the plaintiffs establishes that Harrison was not the "operator" of the facility, and secondly, that the OPA does not apply to the discharge or threatened discharge in Stafford County, Kansas. There is no evidence that Harrison played any role in the direct operation of those aspects of the oil reclaiming plant which led to the alleged discharges of oil. Plaintiffs instead have simply shown that Harrison had some general management responsibilities for the corporation that was the general partner of the company which leased the facility. Harrison specifically denied having any such actual control over the facility's environmental operation, and there is no evidence which would suggest this testimony is incorrect.
The OPA defines an "operator" of a facility in circular terms — an operator of an onshore facility is defined simply as a person "operating such onshore facility." 33 U.S.C. § 2701(26). In interpreting a similarly tautological definition of "operator" under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9707(a)(2), the Supreme Court has held that to be an "operator" within the meaning of the statute, the defendant "must manage, direct, or conduct operations specifically related to pollution." United States v. Bestfoods, 524 U.S. 51, 118 S.Ct. 1876, 1887, 141 L.Ed.2d 43 (1998). Since the plaintiffs have failed to make any showing with respect to Harrison's active control of the facility's environmental operations, judgment as a matter of law is appropriate.
Second, the court finds that the plaintiffs' attempt to apply the OPA to the discharge of a relatively limited amount of oil on the grounds of an oil processing plant in Kansas exceeds the intended scope of the statute. The OPA applies to incidents of discharge, or a substantial threat of discharge, of oil into "navigable waters," which is defined as "the waters of the United States, including the territorial sea." 33 U.S.C. § 2701(21).
The plaintiffs correctly note that a similar definition under the Clean Water Act, 33 U.S.C. §§ 1311 & 1362(12) (1997), has received a very expansive definition. See, e.g., Quivira Min. Co. v. United States EPA, 765 F.2d 126, 128 - 130 (10th Cir. 1985). At the same time, however, it is clear that the CWA's scope is not unlimited. In Chemical Weapons Working Group, Inc. v. United States Dept. of the Army, 111 F.3d 1485, 1489 (10th Cir.1997), the court rejected the plaintiff's argument that a discharge into the air is a discharge under the Clean Water Act, since "common sense dictates that Tooele's stack emissions constitute discharges into the air — not water — and are therefore beyond § 301(f)'s reach." The court held that, "[w]ithout determining the precise jurisdictional limits of the Clean Water Act [airborne] emissions `lack the requisite nexus to navigable waters to render them subject to regulation under that statute.'"
The court finds persuasive the construction of the OPA recently given in Rice v. Harken Exploration, 89 F.Supp.2d 820 (N.D.Tex.1999). The court in that case found persuasive the plaintiff's arguments that the OPA and the CWA should receive similar constructions, but the court ultimately found that the OPA's legislative history required a narrower reading. As in the present matter, the court was dealing with an alleged release of oil at an onshore facility some distance from any significant waterway. The court concluded that the defendant's oil fields were "fields located so far from oceans, bays, shores, or beaches that any discharge of oil is simply too attenuated a threat to `navigable waters' to be covered by the OPA." 89 F.Supp.2d at 827. "[I]t is clear from the legislative history and the few published OPA decisions discussing `navigable waters,'" the court found, "that application of the Act to an onshore oil production facility that is over 500 miles from any ocean or shoreline is an expansion that Congress did not intend." Id.
In the present case, the plaintiffs have presented evidence that some oil spilled onto the ground at the oil reclaiming plant. The spills were miles from any stream. There is absolutely no evidence the oil has migrated off the property. There is no evidence the oil has actually entered any stream, river, or arroyo, or other tributary of a navigable water. There is no evidence here, unlike some of the CWA cases, that any underground aquifer is endangered. Instead, during their cross examination of an expert geologist, plaintiffs have simply raised the possibility that — given a flood of virtually biblical proportions, it was conceivable that (to use the geologist's term) a "molecule" of the oil might reach the Arkansas River. While the OPA's definition of "navigable waters" should not be too narrowly construed, to apply the statute under these circumstances would be to render the requirement of an actual or threatened discharge into "navigable waters" to be a meaningless surplusage.
With respect to the plaintiffs' claim under Kansas law, the plaintiffs have suggested alternately that Harrison is individually liable on the lease either under the principle of piercing the corporate veil, or that Harrison should be deemed a partner under the principle of partnership by estoppel. The plaintiffs have placed particular emphasis on the former, rather than the latter, approach.
Under Kansas law, the ability to pierce the corporate veil should be used "reluctantly and cautiously." Dean Operations, Inc. v. One Seventy Associates, 257 Kan. 676, 683, Syl. ¶ 1, 896 P.2d 1012 (1995). In that case, the Kansas Supreme Court recognized ten factors as useful guidelines in making the decision to pierce the corporate veil:
(1) whether the parent corporation owns all or a majority of the capital stock of the subsidiary; (2) whether the corporations have common directors or officers; (3) whether the parent corporation finances the subsidiary; (4) whether the parent corporation subscribed to all of the capital stock of the subsidiary or otherwise causes its incorporation; (5) whether the subsidiary has grossly inadequate capital; (6) whether the parent corporation pays the salaries or expenses or losses of the subsidiary; (7) whether the subsidiary has substantially no business except with the parent corporation, or no assets...
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