N. States Power Co. v. City of Ashland

• Decision Date: 11 September 2015
• Docket Number: No. 12–cv–602–bbc.,12–cv–602–bbc.
• Citation: 131 F.Supp.3d 802
• Parties: NORTHERN STATES POWER COMPANY, Plaintiff, v. The CITY OF ASHLAND, WISCONSIN, and Ashland County, Wisconsin, Defendants.
• Court: U.S. District Court — Western District of Wisconsin

131 F.Supp.3d 802

NORTHERN STATES POWER COMPANY, Plaintiff,

v.The CITY OF ASHLAND, WISCONSIN, and Ashland County, Wisconsin, Defendants.

No. 12–cv–602–bbc.

United States District Court, W.D. Wisconsin.

Signed Sept. 11, 2015.

Albert Bianchi, Jr., Jon G. Furlow, Michael Best & Friedrich, LLP, Madison, WI, Arthur Francis Foerster, Margrethe Krontoft Kearney, Mary Rose Alexander, Brandon Keith Crase, Malorie R. Medellin, Latham & Watkins, Chicago, IL, for Plaintiff.

Richard Carlisle Yde, Jr., Ted Waskowski, Barbara A. Neider, Erika L. Bierma, Laura E. Callan, Stafford Rosenbaum LLP, Madison, WI, James G. Bullard, David G. Parry, Gregory Alan Fontaine, Nathan Eric Endrud, Minneapolis, MN, David Scott Becker, Freeborn & Peters LLP, Chicago, IL, Mark William Schneider, Teresa Gail Jacobs, Perkins Coie LLP, Portland, OR, Christopher G. Hanewicz, Perkins Coie LLP, Phillip Richard Bower, Richard J. Lewandowski, Thomas Patrick Heneghan, Whyte Hirschboeck Dudek, Madison, WI, for Defendant.

OPINION AND ORDER

BARBARA B. CRABB

, District Judge.

From 1885 until 1947, a manufactured gas plant operated in Ashland, Wisconsin, on a bluff above Lake Superior, generating gas for heating and lighting. For that entire time, the plant discharged tar wastes into the bluff. In 1987, plaintiff Northern States Power Company acquired the plant site and shortly thereafter discovered contamination. It notified the Wisconsin Department of Natural Resources, which began an investigation of the site in 1994.

In 2002, the entire site, which includes the bluff on which the plant stood, the land below the bluff, known generally as Kreher Park, Chequamegon Bay of Lake Superior and the deepwater in the Copper

Falls aquifer underlying the site, was added to the National Priorities List and the Environmental Protection Agency took over the state's work. Ten years later, the agency entered into a consent decree with plaintiff, which agreed to remediate the site.

Now plaintiff is pursuing claims against defendants City of Ashland and Ashland County for contribution to the costs of the cleanup under 42 U.S.C. § 9613

. Although plaintiff has accepted responsibility for the remediation of the Upper Bluff, it denies that the discharges are the sole source or even the major source of the contamination that has been found in Kreher Park and in Lake Superior's Chequamegon Bay. Instead, plaintiff contends that both Ashland County and the City of Ashland bear responsibility for all or most of the contamination below the bluff.

As to defendant Ashland County, plaintiff alleges that in the three years from 1939 to 1942 in which it owned the area, it failed to clean up the wood treating chemicals left by the former owner, Schroeder Lumber Company, leaving these chemicals to sink into the ground and eventually create a waste pond. In addition, plaintiff alleges that while the County owned the land, it demolished the company's smokestacks and refuse burner, adding contaminants to the soil. As to the City of Ashland, plaintiff alleges that this defendant has owned the land since 1942 and that it too failed to clean up the wood treating chemical waste. In addition, plaintiff alleges, the City dispersed contaminants through construction projects in the area, drained the waste dump into the bay, sanctioned the dumping of refuse and the changing of oil for city vehicles and built a city sewer through the park that emptied into the bay. Plaintiff's claims are asserted under the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, 42 U.S.C. §§ 9601

–75.

From the evidence adduced during the eight-day trial to the court, I find that defendant County is not covered under CERCLA and cannot be held liable for any hazardous substances in the land below the bluff or in the bay. Although the County gained title to the Schroeder Company property after the company failed to pay its property taxes in the 1930s, it did so only as a result of the company's tax delinquency and it did not cause or contribute to the release or threatened release of hazardous substances from the facility.

Unlike the County, defendant City has potential liability under CERCLA because it operated Kreher Park. However, plaintiff has not shown that the City was responsible for the addition of any hazardous substances to the site. At most, it may have dispersed some of the existing contamination discharged from the manufactured gas plant. Even assuming that it did, the equitable allocation of response costs is a discretionary decision for the court to make, taking into consideration such factors as the relative contributions of hazardous waste, the plaintiff's settlements with other parties, the defendant's level of voluntary cooperation with the cleanup efforts, the extent of the parties' financial resources and the benefit of the cleanup to the potential contributor. In this case, the factors bearing on that determination weigh in the City's favor and support an allocation of 0%.

For the purpose of deciding this case, I find the following facts from the evidence adduced at trial.

FACTS

A. Background

Plaintiff Northern States Power first discovered tar waste in the bluff when it began construction work on the plant site in 1987, after acquiring the site through merger of its subsidiary, NSP–Wisconsin, with Lake Superior District Power. Two years later, the City of Ashland discovered soil contamination in Kreher Park, a city park that lies between the bluff and Chequamegon Bay. (It is not clear whether the boundaries of the park and the area beneath the bluff and within the remediation area are congruent, but because it makes no difference to the outcome of the case, I will assume they are.) The park occupies a portion of an area that was open water in the 1880's and now lies on a substratum of wood waste dumped into the bay by the lumber companies that lined the shoreline in the late 1880s and early 1900s.

In 1994, when the Wisconsin Department of Natural Resources began investigating the site and undertaking cleanup efforts, it discovered that the contamination of the site was more widespread than it had previously believed, with the principal contamination being two substances. The first was polycyclic aromatic hydrocarbons or PAHs, a category of chemicals often found together in groups of two or more. They "are created when products like coal, oil, gas and garbage are burned but the burning process is not complete." Polycyclic Aromatic Hydrocarbons(PAHs)Fact Sheet, EPA, Jan. 2008. The other was non-aqueous phase liquids, or NAPLS. Non-aqueous phase liquids are either light non-aqueous phase liquids, that is, one of a group of organic substances, including petroleum chemicals, that are relatively insoluble in water but less dense than water, whereas dense non-aqueous phase liquids are also relatively insoluble in water but are denser than water and tend not to mix with it. http://toxics.usgs.gov/definitions/napls.html, visited Sept. 9, 2015. In 2002, the site was added to the National Priorities List, qualifying it for federal funding for cleanup activities. With this action, the Environmental Protection Agency took over the state's work, entering into an agreement with plaintiff for a study and significant cleanup of the site.

In 2012, plaintiff entered into a consent decree with the EPA covering the remediation of the site. Plaintiff then brought suit against the City of Ashland, Ashland County, two railroads that operated at the base of the bluff at one time (the Soo Line Railroad and the Wisconsin Central Railroad, Ltd.), and L.E. Myers Company (which allegedly played a role in the operation of the manufactured gas plant between 1917 and 1922), in an effort to obtain contribution from other potentially responsible parties for the anticipated costs of restoring Kreher Park and Chequamegon Bay. Plaintiff asserted claims under both state law and CERCLA for contribution, cost recovery, declaratory relief and damages. Both railroads settled with plaintiff before trial and L.E. Myers reached a settlement shortly after the start of trial. The state law claims were asserted only against the railroads, leaving only CERCLA claims against the City and County.

B. The Site

The site at issue covers about 40 acres of land in the city and county of Ashland, along the southern shore of Chequamegon Bay. For remedial and investigative purposes, the site has been divided into four parts, referred to by the government agencies as "areas of concern": (1) the soils and groundwater of the Upper Bluff, which is where the manufactured gas plant was located; (2) the Kreher Park soils and shallow groundwater; (3) the sediments in the bay; and (4) deep groundwater in the Copper

Falls Aquifer underlying the site. Only the first three areas play any part in this case.

?

The manufactured gas plant was built on the Upper Bluff in 1885, with about one- fifth of the plant straddling a ravine that ran down to the bay. Within the next few years, the ravine was filled in completely with a mix of materials, including the nearly impenetrable native soil known as "Miller Creek." (The exact date in which the ravine was filled completely is unknown. All of the witnesses on the subject and the EPA agree that it was filled by the early 1900s.).

In 1885, the Ashland area was riding a short-lived economic boom fueled by the harvesting and sale of timber from Wisconsin's extensive forests of eastern white pine. Lumber companies had established sites at the harbor and rafts and ships were plying the lake with cargoes of harvest timber and lumber products. Railroads moved in and built tracks along the base of the bluff, running in a generally east-west direction along the waterfront.

Within a short time, the waterfront became so full of timber waste that it could support buildings. From 1901 until the early 1930s, the John Schroeder Lumber Company owned and occupied a good part of the area at the base of the bluff below the gas plant. It stopped...