Key Tronic Corp. v. US

• Decision Date: 12 August 1991
• Docket Number: No. CS-89-694-JLQ.,CS-89-694-JLQ.
• Citation: 766 F. Supp. 865
• Parties: KEY TRONIC CORPORATION, a Washington corporation, Plaintiff, v. UNITED STATES of America; the United States Air Force; Donald B. Rice, the Secretary of the United States Air Force, in his official capacity; Alumax, Inc., a Delaware corporation, Alumax Fabricated Products, Inc., a Delaware corporation, and Alumax Mill Products, Inc., a Delaware corporation, Defendants.
• Court: U.S. District Court — District of Washington

766 F. Supp. 865

KEY TRONIC CORPORATION, a Washington corporation, Plaintiff, v. UNITED STATES of America; the United States Air Force; Donald B. Rice, the Secretary of the United States Air Force, in his official capacity; Alumax, Inc., a Delaware corporation, Alumax Fabricated Products, Inc., a Delaware corporation, and Alumax Mill Products, Inc., a Delaware corporation, Defendants.

No. CS-89-694-JLQ.

United States District Court, E.D. Washington.

March 19, 1991.

As Amended August 12, 1991.

James R. Moore, Gregory T. Costello, Perkins Coie, Mark W. Schneider, Seattle, Wash., and Richard E. Hayes, Chase, Haskell, Hayes & Kalamon, Spokane, Wash., for plaintiff.

Stephanie Johnson, U.S. Atty., Spokane, Wash., Marilyn Perry Jacobsen, Eileen McDonough, U.S. Dept. of Justice, Land & Natural Resources Div., Environmental Defense Section, Washington, D.C., William D. Maer, Leslie C. Nellermoe, Heller & Ehrman, Seattle, Wash., Roger E. Metz, Ronald G. Morrison, Morrison & Leveque, Spokane, Wash., and Dennis Smith, Wilson, Smith, Cochran & Dickerson, Seattle, Wash., for defendants.

ORDER RE: PLAINTIFF'S MOTIONS FOR SUMMARY JUDGMENT

QUACKENBUSH, Chief Judge.

BEFORE THE COURT is defendant United States' Motion for Enlargement of Time (Ct.Rec. 107), the plaintiff's Motion For Summary Judgment Re: Contribution Claim (Ct.Rec. 99), the plaintiff's Motion For Summary Judgment that Alumax is a Covered Person (Ct.Rec. 103), the plaintiff's Motion for Partial Summary Judgment that Response Costs are Recoverable (Ct.Rec. 94), and defendant United States' Motion to Stay (Ct.Rec. 113), heard with oral argument on March 11, 1991. Mark Schneider and Kathryn Tucker represented the plaintiff. Leslie Nellermoe and William Maer represented defendant Alumax. Eileen McDonough represented the United States Air Force. Having reviewed the record, heard from counsel, and fully considered these matters, the court enters this order to memorialize its oral rulings on these motions.

FACTUAL BACKGROUND

From 1968 to 1986 Spokane County maintained the Colbert Disposal Site ("Colbert") in Spokane County, Washington. From the early 1970's through 1980, the County contracted to have defendant William Schmidt do the work necessary to construct, improve and complete the landfill. In that capacity, Schmidt accepted and disposed of refuse at Colbert. Key Tronic alleges that between 1975 and 1980, Schmidt accepted liquid chemicals from the United States Air Force ("USAF"), Alumax Fabricated Products, Inc. and Alumax Mill Products, Inc. (hereafter collectively "Alumax"), and Key Tronic Corporation, and, therefore, that Key Tronic is entitled to contribution and cost recovery from the USAF and Alumax for monies it paid and expended under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq.

In 1980 drinking water wells around Colbert were found to be contaminated by various chemicals including "TCA" and "TCE". It is not disputed that Key Tronic had deposited such materials at Colbert. Key Tronic alleges that it incurred, at its own initiative, expenses totaling $1,271,511.10 responding to that discovery. Key Tronic subsequently entered into a Consent Decree and Scope of Work statement with the Washington Department of Ecology ("DOE") and the United States Environmental Protection Agency ("EPA"); as part of that decree, Key Tronic agreed to pay $4.2 million in clean-up costs. The Air Force also entered into a consent decree with DOE and EPA in which the Air Force agreed to pay EPA $1.45 million to resolve its liabilities with the EPA for the Colbert cleanup.

On August 9, 1990, the court entered an order (Ct.Rec. 67) relating to the parties' motions for summary judgment. The court dismissed Key Tronic's contribution claims against the USAF relating to Key Tronic's $4.2 million in liability from the consent decree; however, the court did not dismiss Key Tronic's claim against the USAF for contribution relating to the $1.2 million incurred independently by Key Tronic. The court granted in part Key Tronic's motion for partial summary judgment against the USAF, and held that Key Tronic had established CERCLA liability against the Air Force. The court denied Key Tronic's motion for summary judgment against Alumax and held that Key Tronic had not met its burden of proof in establishing that there was no triable issue of fact as to Alumax's liability under CERCLA. The court dismissed the claims against defendant Schmidt.

The United States and Key Tronic subsequently negotiated a consent decree which was signed by this court on January 14, 1991. See Ct.Rec. 92. The consent decree resolved all but the following issues of response cost liability between the United States and Key Tronic:

A. Costs and fees incurred by attorneys and investigators for Key Tronic in the amount of $365,649 during Key Tronic's search for additional potentially responsible parties and costs and fees incurred by attorneys related to the negotiation of the Consent Decree between Key Tronic, the United States, and the State of Washington in The State of Washington v. County of Spokane, CS-89-033-RJM;

B. The salary of David Powers, Key Tronic's General Counsel and Secretary, in the amount of $70,000 for time spent supervising the search for additional potentially responsible parties and negotiating the Consent Decree identified in A;

C. Attorneys' fees and costs incurred by Key Tronic in the prosecution of this action; and

D. Prejudgment interest on excepted claims.

Ct.Rec. 92, pp. 2-3.

Key Tronic now brings the following motions for summary judgment. First, Key Tronic moves for summary judgment that its $4.2 million in liability from the consent decree constitutes "recoverable" monies under CERCLA Section 113, 42 U.S.C. § 9613, for purposes of its contribution claim against Alumax. Second, Key Tronic moves for summary judgment that Alumax disposed of hazardous wastes at the Colbert landfill. Third, Key Tronic moves for summary judgment that its independent response costs of $1.2 million are recoverable under CERCLA.

At oral argument, the plaintiff and defendant Alumax informed the court that all claims against defendant Alumax had been settled, and, therefore, that oral argument on the motions as they related to Alumax was unnecessary. The plaintiff and defendant United States informed the court that, should the court rule against the United States, they had stipulated to the quantum of liability and that they would subsequently submit that stipulation to the court.

DISCUSSION

1. MOTIONS DIRECTED SOLELY AGAINST DEFENDANT ALUMAX

Because of the settlement between Key Tronic and Alumax, two of Key Tronic's motions have been mooted. Therefore, Key Tronic's motion that the $4.2 million consent decree is recoverable under CERCLA for contribution purposes, and Key Tronic's motion that Alumax is a covered person under CERCLA ARE HEREBY DENIED AS MOOT.

II. RECOVERABILITY OF "RESPONSE COSTS"

Key Tronic moves this court to hold that monies it spent independently of the Consent Decree are recoverable under CERCLA as "response costs." By the January 1991 consent decree between Key Tronic and the Air Force, Key Tronic has waived all claims against the United States except for the four items contested. Because Key Tronic has settled its claims with Alumax, these excepted items are the sole remaining claims at issue.

Key Tronic contends the following claims are recoverable from the Air Force under CERCLA as "response costs": (1) prejudgment interest for any liability assessed against the USAF from these motions; (2) attorneys' fees for prosecuting this action; (3) attorneys' and investigators' fees, and opportunity costs of Key Tronic's executive resulting from the search for other potentially responsible parties; and (4) attorneys' fees and opportunity costs of Key Tronic's executive related to the negotiation of the consent decree.¹

A. Prejudgment Interest Against the USAF

CERCLA waives sovereign immunity with the following statutory provision:

Application of Act to Federal Government. (1) In general. Each department, agency, and instrumentality of the United States (including the executive, legislative, and judicial branches of government) shall be subject to, and comply with, this Act in the same manner and to the same extent, both procedurally and substantively, as any nongovernmental entity, including liability under section 107 of this Act.

42 U.S.C. § 9620(a)(1). CERCLA also provides that prejudgment interest in cost recovery actions is available:

The amounts recoverable in an action under this section shall include interest on the amounts recoverable under the preceding paragraphs.

42 U.S.C. § 9607.

Based on the foregoing provisions, Key Tronic contends that prejudgment interest may be awarded against the United States Government.

The Government asserts that prejudgment interest may not be awarded against it for sovereign immunity reasons. Absent express congressional consent to the award of interest in addition to a general waiver of immunity to suit, the United States is immune from an interest award. Library of Congress v. Shaw, 478 U.S. 310, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986). The Government contends that CERCLA does not contain an express waiver of immunity from prejudgment interest as required by Shaw, and the general waiver of liability, despite its reference to Section 107 of CERCLA, is legally inadequate to award prejudgment interest.

The court finds the Government's argument to be unpersuasive. Shaw involved a statute which provided that the United States shall be liable for costs as a private individual; the statute in Shaw did not make any reference to prejudgment interest. The face of 42 U.S.C. § 9620 makes quite clear that Congress waived its sovereign immunity and intended for the Government to be treated as any other private defendant. CERCLA clearly states that in cost recovery actions under § 107 ...