Outboard Marine Corp. v. Thomas, 85-1753

• Decision Date: 23 September 1985
• Docket Number: No. 85-1753,85-1753
• Citation: Outboard Marine Corp. v. Thomas, 773 F.2d 883 (7th Cir. 1985)
• Parties: , 54 USLW 2179, 15 Envtl. L. Rep. 21,094 OUTBOARD MARINE CORPORATION, Plaintiff-Appellant, v. Lee M. THOMAS, Administrator of the United States Environmental Protection Agency, and the United States Environmental Protection Agency, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 883

773 F.2d 883

23 ERC 1233, 54 USLW 2179, 15 Envtl.

L. Rep. 21,094

OUTBOARD MARINE CORPORATION, Plaintiff-Appellant, v. Lee M. THOMAS, Administrator of the United States Environmental Protection Agency, and the United States Environmental Protection Agency Defendants-Appellees.

No. 85-1753.

United States Court of Appeals Seventh Circuit.

Argued June 14, 1985.

Decided Sept. 23, 1985.

Richard J. Phelan, Phelan, Pope & John, Ltd., Chicago, Ill., for plaintiff-appellant.

Anne S. Almy, Asst. U.S. Atty., Anton R. Valukas, U.S. Atty., Chicago, Ill., for defendants-appellees.

Before BAUER and WOOD, Circuit Judges, and GRANT, Senior District Judge. ^*

HARLINGTON WOOD, Jr., Circuit Judge.

The United States Environmental Protection Agency ("the EPA") has determined that there are deposits of the notorious chemical polychlorinated biphenyls, commonly known as PCBs, in certain areas of Waukegan Harbor, Illinois and an adjacent industrial complex owned by Outboard Marine Corporation ("OMC"), and that the blame lies with OMC. As a hazardous waste site, this area ranks high on the National Priority List and is the number one priority site in the State of Illinois. Even though the PCBs were discovered almost ten years ago, to date little has been accomplished. This part of the controversy is concerned with the means chosen by the EPA to finally get started with remedial action.

Factual Background

OMC manufactures outboard motors, lawn mowers, and industrial and turf care vehicles at its industrial complex in the Waukegan Harbor area and at other locations in the United States and abroad. In addition to the manufacturing plant, OMC's Waukegan Harbor complex houses its corporate headquarters, central data processing facilities, and engineering operations. ¹ Over two thousand people are employed at this site.

In 1976, the EPA announced that there were PCBs in the sediments at the bottom of Slip No. 3 and that OMC's operation was the source. Two years later the EPA brought suit against OMC, alleging that the PCBs in Slip No. 3 and in parts of OMC's North Property constituted a threat to the environment and seeking to compel OMC to remove the hazards. For the next seven years, the parties engaged in discovery which included samplings of OMC's complex and the harbor, and studies of the possible effects of PCBs. The EPA then moved to dismiss its case voluntarily. The district court, over OMC's objection, allowed the motion to dismiss without prejudice, but upon the condition that the EPA agree not to sue OMC except under the cost-recovery provisions of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("the Act"), 42 U.S.C. Sec. 9601 et seq. ²

The EPA is now, as permitted under the dismissal, seeking to institute its own remedial action under section 104 of the Act, 42 U.S.C. Sec. 9604, with the opportunity to seek recovery for cleanup costs from the responsible parties under section 107 of the Act, 42 U.S.C. Sec. 9607. In January, 1985, representatives of the EPA and OMC met to discuss EPA access to the OMC complex for design work purposes. In particular, the EPA sought to conduct a "walk-through" of the exterior portions of OMC's property, survey the site, set markers, and collect twenty-three soil borings. The EPA labels these preliminary activities as Phase 1, and claims that access is not presently sought for the purpose of implementing the actual remedy.

To better understand what Phase 1 amounts to, some detailed examination is necessary. The so-called "walk-through" is not a Sunday afternoon stroll. It would involve about sixteen persons and seven automobiles. The surveying would involve about three persons and one van, and the soil borings would involve about seventeen persons and sixteen vehicles. The equipment would include truck-mounted drill rigs, pickup trucks, vans, water trucks, automobiles, a waste hauler, a job trailer and possibly a bulldozer. Approximately 1,000 square feet of the parking lot would be needed to park the equipment. Survey monuments would be left in place to facilitate later construction. This EPA task force prepared to move in on OMC for a maximum of seventy days, a little over two months.

All of this is preliminary to the actual remedial operations which would involve dredging or excavating thousands of cubic yards of sediments from the harbor, north ditch and OMC parking lot, and transporting the material to the OMC Harbor front property for years of treatment in extensive lagoons and other facilities to be constructed by the EPA. Some of the remainder after treatment would be permanently housed in a fifteen-foot high "containment cell" to be built on and to occupy six acres of the OMC parking lot. It is estimated that the construction of these EPA facilities on OMC property would take three and one-half years. From oral argument it appears that the EPA, itself without the power of eminent domain, is not certain how it will proceed to gain access to accomplish its actual remedial construction. The EPA informed us that Congress is considering an amendment to grant the authority to enter for actual construction which it seems unsure about under the present statute. We need not reach that issue.

Access at this time, however, is sought only to do the necessary surveying, soil testing for weight-bearing, and design specification work in preparation for the actual construction. The EPA does not contend that an emergency exists at OMC. There is no imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance. If there is an emergency, it is almost ten years old.

This background summary brings us to the legal issue of how EPA access for Phase 1 may be obtained, and what recourse OMC may have for the threatened EPA invasion of its private property.

Acquisition of Access by EPA

After negotiations with OMC failed to voluntarily provide EPA the access it wanted for its preconstruction purposes, the EPA applied ex parte to a United States magistrate for a warrant for entry and investigation under sections 104(a), 104(b), and 104(e) of the Act, 42 U.S.C. Sec. 9604(a), ³ (b), ⁴ and (e). ⁵ In the application for the warrant, among other things, the EPA informed the magistrate that PCBs existed at the site and that an on-site remedial response was necessary. The EPA stated it relied on section 104(e)(1) as most germane for its statutory right to enter the site to perform the field work necessary to prepare the design plans and specifications for the anticipated cleanup construction. The application recited the unsuccessful efforts to accomplish an access agreement with OMC.

On February 13, 1985, the magistrate, finding that grounds existed for an administrative entry, issued the requested warrant for the so-called Phase 1. When the EPA, armed with the warrant, appeared at OMC's door, admission was refused. After the magistrate denied OMC's motion to quash the warrant, OMC filed this suit seeking to enjoin the EPA from executing the warrant and to reverse the ruling of the magistrate denying the motion to quash the warrant. The district court, 610 F.Supp. 1234, denied OMC's motions for reversal of the magistrate's action and for a preliminary injunction, and took under advisement the EPA's motion to dismiss. The district court examined the issues and, reading the statute broadly, reasoned that since warrants have issued for violation-detection searches, which this is not, but which are as intrusive as the planning search at issue here, the use of the same or similar warrant procedure in this instance was a sensible interpretation of an otherwise ambiguous statute. Even so, the district court considered the use of the warrant, referred to as a search warrant, to be at least unusual and without precedent, and so it seems to be.

The EPA reminds us that the denial of a preliminary injunction will be reversed only for an abuse of discretion, Roland Machinery Co. v. Dresser Industries, 749 F.2d 380, 390 (7th Cir.1984), and contends there was no such abuse here. The EPA argues that OMC has failed to show any irreparable harm and disparages OMC's efforts to equate the proposed design activities with actual implementation of the cleanup remedy. It is the EPA's position that the alleged irreparable harm is no more than some temporary inconvenience to OMC which the EPA will attempt to minimize. The irreparable harm, the EPA argues, will be to the EPA and the public interest if the injunction is granted.

The EPA further contends that OMC has failed to show any likelihood of success on the merits. This, the EPA argues, is because Phase 1, the design activity, is distinct from Phase 2, the actual construction. The EPA, although not conceding that Phase 1 constitutes an unequivocable taking, recognizes that the district court, for the purposes of OMC's motion, assumed that it constituted a taking triggering the "just compensation" requirement of the Fifth Amendment. To answer that claim, the EPA points out that governmental activity that would effect a taking may be enjoined only if the particular activity lacks statutory or constitutional authorization. See Ruckelshaus v. Monsanto Co., --- U.S., ----, 104 S.Ct. 2862, 2882, 81 L.Ed.2d 815 (1984); cf. Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 595-96, 72 S.Ct. 863, 889-890, 96 L.Ed. 1153 (1952) (injunction issued because activity unauthorized). It is the EPA's position that the Tucker Act, 28 U.S.C. Sec. 1491, is the appropriate remedy for any authorized taking, and that compensation need not precede the taking, again relying on Monsanto, 104 S.Ct. at 2880. Although the EPA does not claim to have explicit eminent domain authority, it argues that whether it does or does not is not the test. The EPA explains that the inquiry should be whether the particular statute or its legislative history expresses an...