Morrison Enterprises Llc v. Dravo Corp..

• Decision Date: 05 April 2011
• Docket Number: 10–1469.,Nos. 10–1468,s. 10–1468
• Citation: 638 F.3d 594
• Parties: MORRISON ENTERPRISES, LLC, Plaintiff/Appellant,City of Hastings, Nebraska, Plaintiff,v.DRAVO CORPORATION, Defendant/Appellee.United States, Amicus on Behalf of Appellee.Morrison Enterprises, LLC, Plaintiff,City of Hastings, Nebraska, Plaintiff/Appellant,v.Dravo Corporation, Defendant/Appellee.United States, Amicus on Behalf of Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

638 F.3d 594

72 ERC 1577

MORRISON ENTERPRISES, LLC, Plaintiff/Appellant,City of Hastings, Nebraska, Plaintiff,

v.DRAVO CORPORATION, Defendant/Appellee.United States, Amicus on Behalf of Appellee.Morrison Enterprises, LLC, Plaintiff,City of Hastings, Nebraska, Plaintiff/Appellant,

v.Dravo Corporation, Defendant/Appellee.United States, Amicus on Behalf of Appellee.

Nos. 10–1468

10–1469.

United States Court of Appeals, Eighth Circuit.

Submitted: Nov. 17, 2010.Filed: April 5, 2011.

William T. Session, argued, Shawna M. Bligh, Jacqueline H. Hartis, Joe L. VanAckeren, on the brief, Kansas City, MO, for Morrison Enterprises.Michael E. Sullivan, argued, Hastings, NE, for City of Hastings.Lawrence Alfred Demase, argued, David W. Wagner, James C. Martin, Steven M. Nolan, on the brief, Pittsburgh, PA, for Dravo Corporation.Justin R. Pidot, argued, Lisa Elizabeth Jones, on the brief, U.S. Dept. of Justice, Washington, DC, for amicus USA.Before RILEY, Chief Judge, MELLOY and GRUENDER, Circuit Judges.RILEY, Chief Judge.

Morrison Enterprises, LLC (Morrison) and the City of Hastings, Nebraska (City) (collectively, appellants), and Dravo Corporation (Dravo) are liable within the meaning of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. § 9601 et seq., for hazardous substances released at the Hastings Ground Water Contamination Site (Site). Appellants each sued Dravo under § 107(a) of CERCLA, 42 U.S.C. § 9607(a), seeking to recover some of the costs they incurred responding to contaminated ground water at the Site. The district court ¹ denied appellants' motions for summary judgment and granted summary judgment to Dravo on appellants' cost-recovery claims. The district court held (1) CERCLA § 113(f), 42 U.S.C. § 9613(f), provided appellants' exclusive remedy to recover response costs incurred removing contaminants from the City's ground water, and (2) the City's water supply system claims were untimely. We affirm.

I. BACKGROUNDA. Facts

In 1983, the City attempted to restore a long-closed water production well to service, but immediately received complaints about the water's foul taste and odor. Responding to the complaints, the Nebraska Department of Health (NDOH) and the United States Environmental Protection Agency (EPA) began investigating contamination in the City's wells. On June 10, 1986, the EPA added the Site to the National Priority List (NPL).²

In 1985 and 1986, the EPA notified a number of entities, including Morrison, the City and Dravo, that they were potentially liable under CERCLA for releases and threatened releases of hazardous substances at the Site. The EPA determined the contamination at the Site originated from seven source areas, or subsites, three of which are relevant to these appeals: the FAR–MAR–CO Subsite, the Colorado Avenue Subsite and the North Landfill Subsite. Hazardous substances from each of the subsites entered the City's ground water and were remediated in part by the operation of the “Well–D system” (Well–D), a ground water extraction and treatment system located at the FAR–MAR–CO Subsite, down gradient of the relevant sources of contamination at all three subsites.

The EPA identified Morrison as potentially liable at the FAR–MAR–CO Subsite for response costs necessary to remediate releases of hazardous substances at a grain elevator owned and operated by one of Morrison's predecessors. Dravo and others were identified as potentially liable at the Colorado Avenue Subsite for releases of trichloroethylene (TCE) and other volatile organic compounds (VOC) in connection with the use of a solvent containing TCE as a degreaser in manufacturing operations at the site. The City, Dravo, and others were identified as potentially liable for releases of TCE and other contaminants of concern (COC) at the North Landfill Subsite, a former landfill operated by the City. During the City's operation of the landfill, Dravo disposed of industrial waste containing TCE there.

1. FAR–MAR–CO Subsite

In 1991, Morrison entered into the first of a series of administrative settlements with the EPA, known as administrative orders on consent (AOC), pursuant to which Morrison agreed to perform designated clean-up activities at the FAR–MAR–CO Subsite. In 1996, Morrison entered into a second AOC, pursuant to which Morrison agreed to operate Well–D to extract and treat ground water at the FAR–MAR–CO Subsite and reimburse the EPA for response costs incurred at the subsite.

One stated purpose of the 1996 AOC was to reduce three specific COCs found in ground water at the FAR–MAR–CO Subsite at concentrations hazardous to human health and the environment—TCE, carbon tetrachloride (CT), and ethylene dibromide (EDB). Having been found a “liable party” by the EPA within the meaning of § 107(a), Morrison agreed to finance and operate Well–D to remove each of those COCs. Well–D has been operating since 1997. Morrison maintains it has never used or released TCE anywhere within the Site and that the FAR–MAR–CO Subsite has never been identified as a source of TCE.

In September 2007, the EPA issued a record of decision for the FAR–MAR–CO Subsite requiring the extraction of contaminated ground water at Well–D. On July 29, 2008, the EPA filed a civil action in the district court against Morrison under §§ 106 and 107, seeking an order compelling Morrison to operate Well–D and reimburse the EPA for response costs incurred at the FAR–MAR–CO Subsite. In a consent decree filed October 8, 2008, the EPA and Morrison resolved Morrison's potential liability for contamination at the Site under §§ 106 and 107. The 2008 consent decree continued to rely on Well–D as the primary method of cleaning ground water at the subsite.

In addition to contaminants originating at the FAR–MAR–CO Subsite, ground water extracted and treated at Well–D contains TCE and other contaminants originating at the Colorado Avenue and North Landfill Subsites. In agreements dated June 1995 and July 1997, Morrison, the City, and one other party agreed to coordinate efforts and allocate certain costs associated with the investigation and cleanup of releases of hazardous substances from the North Landfill and FAR–MAR–CO Subsites. Under those agreements, the City contributed to the construction and operation of Well–D. Dravo did not join those agreements.

2. North Landfill Subsite

In October 1992, the City entered into an AOC with the EPA pursuant to which the City agreed to undertake certain response actions at the North Landfill Subsite. In 1998, the EPA sued the City and Dravo under §§ 106 and 107. On August 13, 1998, the City and Dravo jointly entered into a consent decree with the EPA to perform a source-control remedial action at the North Landfill Subsite. Following a second suit by the EPA in 2007, the City and Dravo entered a second consent decree requiring the City and Dravo to participate in operating Well–D to contain the migration of VOCs in the City's ground water and to coordinate efforts with the responsible parties at the FAR–MAR–CO Subsite. The 2007 consent decree also requires the City and Dravo to pay the EPA's response costs and provides contribution protection to the settling parties.

3. Colorado Avenue Subsite

In 1993, the EPA issued a unilateral administrative order requiring Dravo to remediate soil and ground water contamination at the Colorado Avenue Subsite. Several of the City's water production wells are within the vicinity of the Colorado Avenue Subsite and were contaminated with TCE. At the recommendation of the NDOH, the City removed the contaminated wells from service and relocated parts of its water supply system by installing new wells, mains, and related improvements. Though the exact date is unknown, the City began its ongoing efforts to provide alternative water supplies at least as early as 1986.

On September 27, 2001, the government sued Dravo under § 107(a) to recover costs incurred in response to the release of hazardous substances at the Colorado Avenue Subsite. See United States v. Dravo, No. 8:01 CV500 (D. Neb. filed Sept. 27, 2001). On November 26, 2001, Dravo joined the City as a third-party defendant, seeking contribution from the City for the federal government's response costs. The City asserted counterclaims against Dravo for contribution. The City alleged the hazardous substances released by Dravo migrated and contaminated the City's ground water, requiring water system replacements at significant cost to the City.

On January 24, 2006, Dravo and the City entered into a settlement and release agreement to resolve certain claims between them. As part of the agreement, the City reserved its claims against Dravo for any contamination migrating from the Colorado Avenue Subsite to other locations in the Site, including Well–D. On May 24, 2006, the district court approved a consent decree requiring Dravo to take various actions to clean up TCE contamination at the Colorado Avenue Subsite.

B. Prior Proceedings

On July 3, 2008, appellants filed a seven-count complaint against Dravo setting forth the following causes of action: cost recovery under § 107 (Count I); declaratory judgment under § 113(g)(2) (Count II); noncontractual indemnity (Count III); negligence (Count IV); private nuisance (Count V); public nuisance (Count VI); and trespass (Count VII). Appellants jointly brought Counts I and II. Morrison brought Count III alone, and the City brought Counts IV–VII alone. Neither Morrison nor the City brought a claim for contribution under § 113(f). In its answer, Dravo pled as its second affirmative defense that appellants could not recover under § 107 because “their claims [were] for contribution.” Appellants moved to strike the defense, arguing Dravo's defense would only confuse the issues.

On November 6, 2008, the district court denied the motion, noting there were material disputed factual issues regarding the source of TCE at Well–D. The district...