MEMC Pasadena, Inc. v. Goodgames Indus. Solutions, LLC

• Decision Date: 27 October 2015
• Docket Number: Civil Action No. 4:13–CV–599.
• Citation: 143 F.Supp.3d 570
• Parties: MEMC PASADENA, INC., Plaintiff, v. GOODGAMES INDUSTRIAL SOLUTIONS, LLC, Defendant.
• Court: U.S. District Court — Southern District of Texas

143 F.Supp.3d 570

MEMC PASADENA, INC., Plaintiff,

v.GOODGAMES INDUSTRIAL SOLUTIONS, LLC, Defendant.

Civil Action No. 4:13–CV–599.

United States District Court, S.D. Texas, Houston Division.

Signed Oct. 27, 2015.

Lindsey C. Moorhead, Richard E. Griffin, Jackson Walker LLP, Houston, TX, Peter Kenneth Wahl, Jackson Walker L.L.P., Dallas, TX, for Plaintiff.

Gregory S. Hudson, Jason Steven Schulze, Cozen O'Connor, Houston, TX, for Defendant.

MEMORANDUM AND ORDER

KEITH P. ELLISON, District Judge.

Before the Court are the motion for summary judgment filed by Defendant Goodgames Industrial Solutions, LLC ("GIS"), (Doc. No. 54), and the motion for partial summary judgment filed by MEMC Pasadena, Inc., (Doc. No. 56). After carefully reviewing the parties' filings, the record, and the applicable law, the Court finds that MEMC's motion should be granted, and that GIS's motion should be denied in part and granted in part.

I. BACKGROUND

This case is about the disposal of waste generated by MEMC at the U.S. Oil Recovery Superfund Site (the "Site") in Pasadena, Texas. The following facts are undisputed.

MEMC produces ultra-pure granular polysilicon, which is the base material used to manufacture silicon wafers and other related products. (Doc. No. 1 ¶ 11.) The manufacturing process generates waste materials, the disposal of which is regulated by state and federal laws. (Id. ¶ 12.)

GIS "is an environmental consulting and waste management company." (Doc. No. 57, Ex. B.) While GIS began in 2002 as a consulting firm, it "has expanded its role into a complete environmental waste disposal and service company." (Id. ) GIS is a single-member limited liability corporation, and Van Goodgame is its sole member. (Id., Ex. D.)

Beginning in late 2004, MEMC hired GIS to coordinate the disposal of it sodium silicate waste stream. (Id., Ex. M; Doc. No. 55, Ex. 1 at 19.) GIS acted as a waste broker for this waste stream until 2009 or 2010. At that time, MEMC no longer required off-site treatment of its wastewater. (Doc. No. 55, Ex. 2 at 42–43.) As a waste broker, GIS facilitated the movement of waste from MEMC, as the waste generator, to an approved waste disposal facility. (Id., Ex. 1 at 19; Doc. No. 57, Ex. M at 7.)

The approval process for waste disposal runs in two directions. The waste generator approves the disposal facility based on its evaluation of cost and the facility's ability to treat and dispose of the waste. (Doc. No. 55, Ex. 1 at 14 & Ex. 8.) The disposal facility approves the waste by receiving a sample to test for "composition, treatability, and compatibility with other waste streams." (Id., Ex. 8 at 5.) As described in the following paragraphs, GIS facilitated both approval processes for MEMC and U.S. Oil Recovery LLC.

GIS suggested the U.S. Oil Site to MEMC as a disposal facility. (Id., Ex. 1 at 19.) GIS informed MEMC of the costs associated with the Site. (Id. ). GIS would receive a quote from U.S. Oil for disposal of a particular type of waste. GIS would then present a quote to MEMC with the costs for disposal and transportation, plus GIS's markup. For example, on September 10, 2004, GIS received a quote from U.S. Oil Recovery for disposal of MEMC's sodium silicate solution at $0.012 per pound, with a $150 minimum disposal, with various conditions applying to the price, such as the price being valid for forty-five days. (Doc. No. 59, Ex. DD.) On September 14, 2004, GIS provided a quote for disposal of sodium silicate solution to MEMC at $0.016 per pound, with a $200 minimum disposal charge, and the same conditions applying to the price, plus the additional condition of the price being subject to any applicable local, state, and federal taxes. (Id., Ex. Y at 4–5.) GIS's quote to MEMC also included transportation at $75 per hour. (Id. at 5.) Over the years, GIS provided MEMC with updated quotes for disposal of sodium silicate solution and quotes for other types of waste. (Id. at 6–13.)

When MEMC was unfamiliar with the reputation of a new potential disposal facility, MEMC's practice was to perform a site visit before it would use that facility. (Doc. No. 55, Ex. 3 at 37.) Mr. Goodgame organized MEMC's visit to the Site for an audit. (Id., Ex. 7 at 30.) In October 2004, three MEMC employees performed an audit of the Site. (Id. at 32–33; id., Ex. 8 ¶ 5.0.) After the audit, GIS sent MEMC the completed prequalification package for the Site. (Id., Ex. 7 at 32–33; Doc. No. 57, Ex. M at 7.) MEMC had provided the prequalification form to GIS. (Doc. No. 55, Ex. 1 at 24.) GIS passed it along to U.S. Oil, U.S. Oil completed it and returned it to GIS, and GIS then submitted it to MEMC for its review. (Doc. No. 57, Ex. M at 7.) Ultimately, MEMC approved the Site for disposal. (Doc. 55, Ex. 2 at 32.)

When MEMC had waste that was approved to go to U.S. Oil, MEMC would contact Mr. Goodgame to schedule the waste to be transported there. (Id., Ex. 1 at 36.) A MEMC engineer would call or email Mr. Goodgame to ask how many loads U.S. Oil could handle. (Doc. No. 57, Ex. E at 3–4.) Based on Mr. Goodgame's answer, a MEMC engineer would complete the manifest for transporting the waste. At MEMC's request, GIS provided MEMC with waste manifests with the information about the disposal site and the transporter completed. (Id., Exs. E, O, Q, & S.) GIS would also pick up samples of the waste. (Id., Ex. O; Doc. No. 63, Ex. 3 at 3.) In addition, GIS would contact a trucking company previously approved by MEMC and instruct it to pick up waste at MEMC at a particular time and day and deliver it to U.S. Oil. (Doc. No. 57, Ex. L; id., Ex. D.)

U.S. Oil always dealt directly with Mr. Goodgame, not with MEMC. (Id., Ex. G.) U.S. Oil sent invoices to GIS, not MEMC. (Id. at 22; Doc. No. 59, Ex. Z.) GIS's accountant would receive these invoices and then create customer invoices for MEMC. (Doc. No. 57, Ex. H.) At least once, GIS's invoice to MEMC did not reference the name of the disposal facility at all and simply billed MEMC for transportation and disposal expenses. (Doc. No. 63, Ex. 1.) GIS marked up the disposal price when it invoiced MEMC. (Id., Ex. 3.) The markup was at least 10% on the disposal price. (Id. ) GIS's total markup on disposal and transportation costs ranged from 15% to 26%. (Id., Exs. 3 & 20.) U.S. Oil considered GIS, not MEMC, its customer. (Doc. No. 57, Ex. G at 5.) Likewise, Mr. Goodgame once referred to GIS as U.S. Oil's customer when asking U.S. Oil to let GIS know about problems at the plant after U.S. Oil had contacted Bealine, a trucking company that had transported the waste. (Id., Ex. G at 6.)

On one occasion in April 2007, U.S. Oil was unable to take a scheduled load of wastewater from MEMC due to a line break. (Id., Ex. I.) Mr. Goodgame negotiated for U.S. Oil to pay the demurrage after the truck transporting MEMC's wastewater spent four hours waiting at U.S. Oil and another four hours going to a different facility. (Id., Exs. I & N.) Mr. Goodgame informed MEMC via email that, because the U.S. Oil Site was backed up, "I am rerouting the Sodium Silicate to Texas Molecular," a different disposal facility. (Doc. No. 63, Ex. 9.) Mr. Goodgame further explained his plan to "check with U.S. Oil on Tuesday to see how things are going and [when] they have breathing room, I will start back to U.S. Oil. It could be as early as Wednesday." (Id. )

MEMC had the final authority to approve of a disposal facility. (Doc. No. 55, Ex. 1 at 14). Once GIS identified a potential facility, MEMC conducted its own evaluation of that option. (Id., Ex. 1 at 22; Doc. No. 61, Ex. 11 at 24–25, 77.) In addition to pre-approving disposal facilities, MEMC decided where its actual waste would go. (Doc. No. 55, Ex. 1 at 54.) GIS did not have the authority to choose a facility on MEMC's behalf. (Id.,Ex. 1 at 37; Doc. No. 61, Ex. 11 at 179–80, 188 & Ex. 15 at 50.)

On December 20, 2012, the U.S. Environmental Protection Agency Superfund Division sent GIS a letter about the Site. (Doc. No. 57, Ex. A.) The letter notified GIS that it "believes that [GIS] may be liable under Section 107(a) of [the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") ] with respect to the Site as a person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person." (Id. )

On March 6, 2013, MEMC filed its complaint against GIS. (Doc. No. 1.) The complaint alleges eight claims for relief: contribution under Section 113 of the CERCLA, contribution under Sections 361.343 and 361.344 of the Texas Solid Waste Disposal Act ("TSWDA"), breach of contract, negligence/gross negligence, professional negligence, breach of fiduciary duty, negligent misrepresentation, and fraud/fraudulent misrepresentation. The complaint also seeks attorneys' fees, costs, and interest.

On July 20, 2015, the parties filed the motions now before the Court. GIS's motion seeks summary judgment on all claims. (Doc. No. 54.) MEMC's motion requests summary judgment only as to GIS's liability for contribution under CERCLA and TSWDA. (Doc. No. 56.) The parties filed responses to each other's motions. (Doc. Nos. 61 & 63.) MEMC also filed a reply. (Doc. No. 64.) The time for GIS to file a reply has passed. The motions are ripe for adjudication.

II. STANDARD OF REVIEW

A motion for summary judgment should be granted if no genuine dispute as to any material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a) ; Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Material facts are those whose resolution "might affect the outcome of the suit under the governing law." Willis v. Roche Biomedical Labs., 61 F.3d 313, 315 (5th Cir.1995) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A dispute is genuine "if the evidence is such that a reasonable jury could return...