Miss. Dep't of Envtl. Quality v. Pac. Chlorine, Inc.

Decision Date01 November 2012
Docket NumberNo. 2010–SA–01073–SCT.,2010–SA–01073–SCT.
Citation100 So.3d 432
PartiesMISSISSIPPI DEPARTMENT OF ENVIRONMENTAL QUALITY v. PACIFIC CHLORINE, INC.
CourtMississippi Supreme Court

OPINION TEXT STARTS HERE

John T. Kitchens, Brandon, Simine Bazyari Reed, attorneys for appellant.

Cecil Maison Heidelberg, Ridgeland, attorney for appellee.

Before DICKINSON, P.J., CHANDLER and KING, JJ.

KING, Justice, for the Court:

¶ 1. Vicksburg Chemical Company (VCC) filed for bankruptcy in 2002. Included in its bankruptcy estate was over 500 acres of real property, a portion of which was contaminated. Pursuant to an agreed order, the bankruptcy court allowed VCC to abandon the property and allowed the Mississippi Department of Environmental Quality (MDEQ) to choose the purchaser. Without the aid of any guidelines or statutory law regarding this process, MDEQ, at the suggestion of the Attorney General's Office (AG), published a Request for Proposals (RFP) to identify interested parties capable of removing the contamination. The plaintiff, Pacific Chlorine, Inc. (PCI), was one of several companies to submit a proposal. MDEQ did not select PCI's proposal, but instead selected Harcros Chemicals, Inc. (Harcros), a company which worked closely with the City of Vicksburg (the City) on its proposal.

¶ 2. Aggrieved, PCI sued MDEQ and the City in the Circuit Court of Hinds County, raising several claims. PCI settled with the City. Following a bench trial, the trial court rendered a judgment against MDEQ. Now, MDEQ appeals to this Court, raising six assignments of error that fall into three categories: whether PCI is required to exhaust its administrative remedies, whether the trial court erred by denying MDEQ's motion to dismiss/motion for summary judgment, and whether MDEQ is immune from suit under the Mississippi Tort Claims Act (MTCA).

¶ 3. This case presents an issue of first impression in which the Court must review whether MDEQ, the state agency tasked with overseeing the cleanup of contaminated land, is acting within the scope of its authority when assisting a bankruptcy court with finding a purchaser for contaminated land. We find it is. We also rule that the trial court erred by finding that the RFP created a contract between the parties. Because we resolve the case on this issue, the remaining issues are moot, and we reverse and render the trial court's judgment.

FACTS AND PROCEDURAL HISTORY

¶ 4. In 2002, VCC filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York. On August 29, 2002, VCC filed a motion with the bankruptcy court seeking to abandon the VCC facility and its surrounding propertyin exchange for a release of liability for the environmental contamination.1 The property consisted of over 500 acres, approximately 40 acres of which was contaminated, located south of Vicksburg, Mississippi, along the Mississippi River. PCI monitored the bankruptcy proceeding.2 Both MDEQ and Harcros filed objections to the motion to abandon the property. MDEQ requested that VCC be enjoined from transferring the property until it complied with applicable environmental standards.

¶ 5. On October 18, 2002, the bankruptcy court entered a “Stipulation and Order Authorizing Abandonment of ... Vicksburg Manufacturing Facility and Granting Related Relief.” 3 In order to be released from its liability arising from the environmental contamination of the subject property, VCC agreed to allow MDEQ to select the purchaser of its property. Pursuant to the parties' agreement, the bankruptcy court authorized abandonment of the property to the non-bankruptcy estate and allowed MDEQ to select the purchaser of the facility.4 The order provided that:

[U]pon written request by the MDEQ, the Vicksburg non-bankruptcy estate shall convey title to the Vicksburg facility or part thereof to any entity identified by the MDEQ. Any consideration received for the transfer of the respective Facilities or parts thereof shall be applied to the environmental cleanup of the respective Facilities and shall be treated as a contribution by the Debtors to such cleanup.... 5

¶ 6. Charles Howard Chisolm, then Executive Director of MDEQ, testified that MDEQ had never been in this position—assisting a bankruptcy court and a private company in finding a buyer for private property—and, thus, sought advice from the AG. In a letter to the AG, Chisolm asked the following:

Do any state laws, such as bidding or property sale laws, apply to MDEQ's direction under court order of the sale of property that is not state property, or do any state laws provide guidance as to how MDEQ should undertake to choose between various proposals by third parties to purchase the property. It is MDEQ's current plan to have the proceeds of any sale deposited in a trust account already existing for the remediation of this property. My question pertains to the actual mechanics of choosing a buyer and directing the sale of the property.

Charles H. Chisolm, Op. Att'y Gen., 2002 WL 31911101 (Nov. 8, 2002). Because this was not state property, the AG opined that state law did not apply and directed MDEQ to proceed under the bankruptcy-court order. Id. However, the AG encouraged MDEQ to “consider seeking competitive proposals in order to receive the greatest possible public benefit.” Id.

¶ 7. In January 2003, MDEQ published its RFP for the VCC property, stating its intention to select a purchaser first who would remediate the property and second return it to productive use.6 The RFP clearly stated that:

This is not a formal bidding process, and MDEQ reserves the right to reject all proposals or to request additional information from some, all, or none of the prospective purchasers. MDEQ reserves the right to reopen the proposal process and to accept further proposals from other parties. No warranty is made or intended as to the information concerning VCC or VCC's property stated in this request for proposals. Those who submit proposals are at risk to conduct appropriate investigation concerning the correctness or representations made by VCC or other parties and/or contained or reflected in this request or in the files of MDEQ.

(Emphasis added). MDEQ requested prospective purchasers to provide their name, a business plan (including plans for remediation and property development), and their history of environmental compliance for all operations in the United States. The selected company, if any, would be given simply the right to continue negotiations to purchase the property.

¶ 8. First, MDEQ chose to negotiate with Jacobs Entertainment but the company later pulled out of negotiations. Then the City, which wished to build a golf course, offered to purchase the uncontaminated property, but MDEQ declined its offer.

¶ 9. Thereafter, on July 21, 2003, Chisolm sent a letter to two primary contenders—PCI 7 and Harcros.8 Chisolm instructed the companies, if they remained interested, to “deliver a detailed offer to purchase the facility and property, provide environmental insurance, reach a guaranteed fixed price remediation contract, sell property to the City, etc., or any combination of the above that you choose to create your offer package.” The companies were to provide any additional information it wanted MDEQ to consider by August 22, 2003, to Trey Hess, MDEQ's point person for the RFP. MDEQ also encouraged the companies to meet with the City, which had a keen interest in the land's use, prior to submitting its proposals. Once again, MDEQ stated that it [did] not intend to enter a period of ‘exclusive negotiations' or an option contract with any party,” and it [was] not obligated to accept any proposal made to it by [the companies].” MDEQ also had assembled its own team of professionals to review the proposals and help it make the final decision.

¶ 10. Both PCI and Harcros shared their proposals with City officials. PCI's proposal was a more in-depth, multi-volume document, and Harcros's proposal was a summary of the services it planned to provide. 9 Both companies planned to reopen the plant. And both companies planned to remediate the property—PCI committed $2.5 million and Harcros pledged $8 million to the cleanup. According to Nancy Thomas, the City attorney, PCI initially proposed (1) to sale the City certain parcels of land for $1.25 million contingent upon the City selling PCI gas at cost plus twenty-five cents per unit, (2) a 10 percent profit-sharing deal, and (3) a guarantee that the City would purchase all of its chlorine from PCI. Thomas informed PCI that it was illegal for the City to share profits with a for-profit company, to bind a future administration to a gas contract, and to give its chlorine contract to PCI instead of the lowest and best bidder. In hopes of pleasing the City, PCI slightly revised its proposal, eliminating the profit-sharing and chlorine-contract provisions, but the offer still included the gas-supply provision.

¶ 11. For its proposal, Harcros partnered with Arcadis G & M, Incorporated, a well-known remediation company, to create a plan to cleanup, reuse, and redevelop the property. It also proposed to work with the City to develop a championship-style golf course. According to Thomas, this option would not require the City to expend funds.

¶ 12. The City preferred Harcros's proposal and made its preference known to MDEQ and PCI well before the RFP deadline. On June 6, 2003, the City wrote MDEQ, stating that it was working with Harcros on a conceptual proposal for the VCC property. Chisolm testified that MDEQ was not bound by the City's desires. While MDEQ appreciated the City's proactive approach, Chisolm made clear to the City that MDEQ would continue to consider independently all options. On August 11, 2003, the City took it upon itself to inform PCI that Harcros's proposal was more suitable for its needs. Despite this, PCI scheduled a meeting with the City to discuss other options, but that meeting was unsuccessful.10

¶ 13. Harcros requested that the City enter into...

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