In re Acushnet River & New Bedford Harbor Proceed.

• Decision Date: 06 November 1987
• Docket Number: Civ. A. No. 83-3882-Y.
• Citation: 675 F. Supp. 22
• Parties: In re ACUSHNET RIVER & NEW BEDFORD HARBOR PROCEEDINGS RE ALLEGED PCB POLLUTION.
• Court: U.S. District Court — District of Massachusetts

675 F. Supp. 22

In re ACUSHNET RIVER & NEW BEDFORD HARBOR PROCEEDINGS RE ALLEGED PCB POLLUTION.

Civ. A. No. 83-3882-Y.

United States District Court, D. Massachusetts.

November 6, 1987.

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COPYRIGHT MATERIAL OMITTED

MEMORANDUM OF DECISION CONCERNING CERTAIN PRE-TRIAL MOTIONS: SUBJECT MATTER AND PERSONAL JURISDICTION, CORPORATE CAPACITY TO SUE AND BE SUED

YOUNG, District Judge.

On December 10, 1983, the United States and the Commonwealth of Massachusetts filed separate complaints — now partially consolidated — against the same six corporate defendants,¹ alleging that each one was liable for polychlorinated biphenyl (PCB) contamination of New Bedford Harbor and the Acushnet River. Taken together, the lawsuits seek affirmative injunctive relief, clean-up costs, response costs, a declaration of liability for future response costs, recovery for damages to natural resources pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601-9615 ("CERCLA"),² the River and Harbor Act, 33 U.S.C. § 407, the Federal Clean Water Act, 33 U.S.C. §§ 1251-1376, the Resource Conservation and Recovery Act, 42 U.S.C. § 6972 et seq. ("RCRA"), and various Massachusetts statutory and common law theories of liability. The corporations have put up a spirited defense, complicated by a series of related—and now partially consolidated — actions dealing with the insurance aspects of a potentially catastrophic business loss.³

Management of these sprawling congeries of cases has proved challenging and the Court expresses its appreciation to all the litigants and their counsel for their vigorous yet thoughtful and well-supported advocacy. As we have worked together to ready these cases for trial, the Court has made a number of rulings from the bench which warrant written opinions explaining and supporting the Court's reasoning. Other matters which have been taken under advisement are dealt with herein. The matters addressed in this and succeeding memoranda are organized in the order in which, logically, they ought present themselves pursuant to the Federal Rules of Civil Procedure, taking the two substantive cases first and then dealing with the insurance matters. It is appropriate to note that this approach imparts a deceptive sense of order and progress which—and for this the Court takes full responsibility —is largely lacking in the day to day management of cases this complex and convoluted. It is to be hoped that these written expressions of opinion will convey both the Court's reasoning on the substantive issues as well as a sufficient overview of these related cases that all parties may comprehensively assess their positions prior to the actual commencement of trial.

I. The Substantive or Underlying Environmental Cases

A. Motion to Dismiss for Lack of Subject Matter Jurisdiction

Included among the myriad motions filed in the course of this litigation was a motion to dismiss for lack of subject matter jurisdiction, filed by all defendants on July 2, 1984. The basis of that motion was that neither sovereign had given the defendants written notice of the CERCLA claims sixty days prior to filing suit. The defendants claimed that under § 112(a)⁴ such notice was a jurisdictional prerequisite to a court action for damages under § 107, 42 U.S.C. § 9607. Judge McNaught, to whom this case originally was assigned, denied this motion on March 26, 1985. Although that denial was without opinion, the result was consistent with the view, earlier expressed by that judge that, while § 112(a) does establish a jurisdictional prerequisite to suit, "constructive notice" is sufficient to satisfy the jurisdictional requirement. See Dedham Water Co. v. Cumberland Farms Dairy, Inc., 588 F.Supp. 515, 517 (D.Mass. 1983) (hereinafter "Dedham Water I").

Later in 1985, the First Circuit decided Garcia v. Cecos International, Inc., 761 F.2d 76 (1st Cir.1985). That decision involved the citizen suit provision of the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. §§ 6901-6987. The plaintiff there had filed suit without first giving sixty days formal notice to the proper parties, as then was required by a provision of RCRA, 42 U.S.C. § 6972(b).⁵ The Garcia court refused to follow the "pragmatic" approach to notice requirements taken by other courts in the context of similar environmental legislation. See e.g., Pymatuning Water Shed Citizens v. Eaton, 644 F.2d 995 (3d Cir.1981). Instead, the First Circuit interpreted RCRA as requiring a citizen to wait sixty days after "actual notice" before commencing suit. Garcia v. Cecos International, Inc., supra at 80.

The actual notice requirement of Garcia conflicts with the notion of constructive notice espoused by Judge McNaught in Dedham Water I and, in the wake of Garcia, Judge McNaught reversed his earlier decision and dismissed the Dedham Water Company case for lack of subject matter jurisdiction. In dismissing the case Judge McNaught held that the notice requirement of § 112(a) is a jurisdictional prerequisite that must be strictly satisfied before bringing suit. Dedham Water Co. v. Cumberland Farms, Inc., 643 F.Supp. 667, 669 (D.Mass.1986) (hereinafter Dedham Water II). In light of these two decisions the defendant Aerovox, Incorporated ("Aerovox") moved this Court to reconsider the earlier denial of the motion to dismiss. This Court ruled that it was in the best interests of justice to reconsider Aerovox's motion to dismiss, but after reconsideration again denied the motion to dismiss for lack of subject matter jurisdiction.⁶ This Court's reasoning on the matter has become of little moment, however, since the First Circuit in Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074 (1st Cir.1986) reversed Dedham Water II and definitively held in this Circuit that pre-suit notice as provided in 42 U.S.C. § 9612 is not required in a CERCLA action of the sort before this Court since it does not involve a "claim which may be asserted against the Fund," and that the 1984 amendment to RCRA, 42 U.S.C. § 6972, applies retroactively to vest this Court with subject matter jurisdiction over the RCRA aspect of the claims. That decision disposes of these issues in this case, convincing this Court that the motion to dismiss for lack of subject matter jurisdiction was properly denied.

B. The Motion of RTE Corporation to Dismiss for Lack of Personal Jurisdiction

This motion to dismiss for lack of personal jurisdiction is rather untypical. What makes this case different is that the governmental plaintiffs concede that RTE Corporation ("RTE") itself has none of the minimum contacts with the forum state traditionally thought necessary to justify the exercise of jurisdiction over an out of state defendant. Instead, the United States and the Commonwealth oppose the motion on two grounds. First, they argue that CERCLA's § 106, 42 U.S.C. § 9606, implicitly authorizes nationwide service of process, and that therefore service on RTE in Wisconsin established this Court's jurisdiction. In the alternative, the sovereigns argue that this Court should "pierce the corporate veil" of Aerovox, and treat Aerovox, which all agree is subject to this Court's jurisdiction, as RTE's alter ego. The Court will address these arguments in turn.

1. The Issue of Nationwide Service of Process

It is elemental that in enacting a statute Congress has the power to provide for nationwide service of process if it so chooses. See Robertson v. Railroad Labor Board, 268 U.S. 619, 622, 624, 45 S.Ct. 621, 622-23, 623, 69 L.Ed. 1119 (1925); 4 Wright & Miller, Federal Practice and Procedure §§ 1118 and 1125. That Congress has not expressly provided for nationwide service under CERCLA does not end the inquiry. In addition, the Court must ask whether Congress impliedly intended that "the process of every District Court shall run into every part of the United States." Robertson v. Labor Board, supra at 622, 45 S.Ct. at 622; First National Bank of Canton, Pennsylvania v. Williams, 252 U.S. 504, 509-10, 40 S.Ct. 372, 373, 64 L.Ed. 690 (1920). Where Congress has authorized service of process outside the territorial limits of the forum state, either expressly or impliedly, exercise of jurisdiction over the defendant will comport with due process so long as that defendant has "minimum contacts" with the United States as a whole. Amtrol, Inc. v. Vent-Rite Valve Corp., 646 F.Supp. 1168, 1172 (D.Mass.1986), citing Driver v. Helms, 577 F.2d 147, 156 (1st Cir.1978), rev'd on other grounds sub nom. Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980). Here, the sovereigns argue that CERCLA impliedly authorizes nationwide service of process, and that therefore this Court may properly exercise jurisdiction over RTE, which concededly has minimum contacts with the United States.

The argument that CERCLA impliedly authorizes nationwide service of process is rooted in the rationale of United States v. Congress Construction Co., 222 U.S. 199, 32 S.Ct. 44, 56 L.Ed. 163 (1911). In that case the United States brought an action under the Materialmen Act of 1894 against the principal and sureties on a payment bond. The action was brought in the district in which the defendants resided, which was different from the district in which the underlying construction was to be performed. The Circuit Court allowed a motion to dismiss for what we would now call improper venue. The Supreme Court affirmed. The Court noted that the statute expressly required that actions brought in the name of the United States be brought "in the Circuit Court of the United States in the district in which said contract was to be performed, and not elsewhere." Id. at 203, 32 S.Ct. at 46 (emphasis in original). In arguing for an interpretation allowing suits to be brought directly by the United States in the district in which a defendant resided, the government assumed that it often would be impossible to...