Pneumo Abex Corp. v. High Point, Thomasville and Denton R. Co.
| Decision Date | 29 April 1998 |
| Docket Number | Nos. 97-1593,97-1594 and 97-1599,s. 97-1593 |
| Parties | , 28 Envtl. L. Rep. 21,261 PNEUMO ABEX CORPORATION; Whitman Corporation; City of Portsmouth, Virginia, a municipal corporation; Portsmouth Redevelopment and Housing Authority, Plaintiffs-Appellees, v. HIGH POINT, THOMASVILLE AND DENTON RAILROAD COMPANY, Defendant-Appellant, Norfolk Southern Railway Company; Norfolk & Western Railway Company, Defendants & Third Party Plaintiffs-Appellants, and CSX Corporation; Erie Lackawanna, Incorporated; Consolidated Rail Corporation; Greenlease Holding Company; Lake Terminal Rail Company; New York, Susquehanna & Western Railroad Company; USX Corporation; John C. Holland, Jr.; Cambria & Indiana Railroad Company; Florida East Coast Railway Company, Defendants, CSX Transportation, Incorporated; Florida East Coast Industries, Incorporated; Fruit Growers Express Company, Incorporated; Pittsburgh & Lake Erie Railroad Company, Incorporated; Richmond, Fredericksburg & Potomac Railroad Company, Incorporated; Union Railroad Company, Incorporated; Bessemer and Lake Erie Railroad Company, Incorporated, Defendants & Third Party Plaintiffs, Kaufman & Canoles, P.C., Party in Interest, v. The RUNNYMEDE CORPORATION; Holland Investment and Manufacturing Company, Incorporated; American Premier Underwriters, Incorporated; Wimco; Wimco Metals, Incorporated; Wilmat Holdings, Incorporated; Triangle Industries, Incorporated; Illinois Central Railroad Company, Third Party Defendants. Virginia Manufacturers Association; American Automobile Manufacturers Association; Institute of Scrap Recycling Industries, Incorporated, Amici Curiae. PNEUMO ABEX CORPORATION; Whitman Corporation; City of Portsmouth, Virginia, a Municipal Corporation; Portsmouth Redevelopment and Housing Authority, Plaintiffs-Appellees, v. CSX TRANSPORTATION, INCORPORATED; Fruit Growers Express Company, Incorporated, Defendants & Third Party Plaintiffs-Appellants, and CSX Corporation; Erie Lackawanna, Incorporated; Consolidated Rail Corporation; Greenlease Holding Company; High Point, Thoma |
| Court | U.S. Court of Appeals — Fourth Circuit |
ARGUED: Kevin Allan Gaynor, Vinson & Elkins, L.L.P., Washington, DC, for Appellants. Joseph Gerard Homsy, Zevnik, Horton, Guibord & McGovern, Chicago, IL, for Appellees. ON BRIEF: George C. Hopkins, S. Scott Gaille, Vinson & Elkins, L.L.P., Washington, DC; Joseph M. Spivey, III, Hunton & Williams, Richmond, VA, for Appellants. John W. Roberts, Sr., Lea D. Leadbeater, Zevnik, Horton, Guibord & McGovern, Chicago, IL; James A. Gorry, III, Taylor & Walker, P.C., Norfolk, VA, for Appellees. Channing J. Martin, Christopher D. Pomeroy, Williams, Mullen, Christian & Dobbins, Richmond, VA; Carol C. Wampler, Virginia Manufacturers Association, Richmond, VA; Julie C. Becker, American Automobile Manufacturers Association, Washington, DC, for Amici Curiae Associations. J. Thomas Wolfe, R. Michael Sweeney, Institute of Scrap Recycling Industries, Inc., Washington, DC, for Amicus Curiae Institute.
Before LUTTIG, Circuit Judge, GOODWIN, United States District Judge for the Southern District of West Virginia, sitting by designation, and MICHAEL, Senior United States District Judge for the Western District of Virginia, sitting by designation.
Reversed and remanded by published opinion. Senior Judge MICHAEL wrote the opinion, in which Judge LUTTIG and Judge GOODWIN joined.
Since the enactment in 1980 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), litigation over the cost of clean up of polluted sites has grown steadily. The courts have struggled to interpret and refine the enforcement and liability scheme laid out by the Act. This case joins the growing number of suits raising questions about the limits of liability for environmental pollution.
Between 1927 and 1978, Pneumo Abex Corporation's predecessor, Abex Corporation, operated a railroad parts foundry in Portsmouth, Virginia ("the Foundry"). Pursuant to contracts for sale ("conversion agreements"), railroads shipped used journal bearings to the Foundry for processing into new journal bearings. Journal or wheel bearings are used on railroad cars to hold lubricating oil against the axle to reduce friction. They are comprised of a lead lining ("babbitt") and a bronze or brass 1 "back." Pursuant to the conversion agreements, the railroads shipped the wheel bearings to the Foundry and received credit for the weight of wheel bearings against a purchase of new wheel bearings (after a deduction for weight attributed to dirt and grease). Among the sellers of journal bearings to the Foundry were the defendant-appellants: Norfolk Southern Railway Company, Norfolk & Western Railway Company, CSX Corporation, CSX Transportation, Incorporated, and Fruit Growers Express Company, Incorporated. These sellers were responsible for approximately 80.1% of journal bearings sold to the Foundry for reuse. Other sellers of wheel bearings settled with the defendants prior to trial.
Upon receipt, the Foundry heated the dirty wheel bearings in a low-temperature furnace to "sweat off" the dirt, grease, and any impurities and to separate the back from the lining. As the metal melted, impurities floated to the top and could be skimmed off. This slag was collected from the furnaces and placed on the back lot of the Foundry's property. The three furnaces used to heat metal at the Foundry also produced smoke and fumes. Employees were, at one point, required to wear air filters. A dust collector drew in the dust from the melting process and deposited it in large steel drums. These drums were also emptied of the dust onto the back lot.
After the Foundry closed in 1978, the EPA sampled the soil in the Foundry lot and, over the course of several years, found elevated levels of lead, zinc, copper, tin, and antimony in the soil (all metals that were used to create the wheel bearings). The EPA designated the site as a Superfund Site. Beginning in 1986, Abex began response activities at the site pursuant to state and federal EPA orders. EPA estimates that the permanent remedy will cost at least $21 million. The current defendants and several other parties were contacted by the EPA as "potentially responsible parties" under the CERCLA. 2 While other potentially responsible parties cooperated with the EPA in clean up efforts, the defendants in the instant case refused to contribute to the response costs, asserting that they are not liable for the response costs under CERCLA. The plaintiffs sued for contribution under Sections 107 and 113 of CERCLA. The district court dismissed the 113 action as redundant. It then allocated responsibility and costs under Section 107. The defendants challenge the district court's finding that they are liable for the contamination of the site under CERCLA, that Pneumo Abex has standing to proceed under section 107, that section 107 is the proper vehicle for a suit for contribution by Pneumo Abex, and that the allocation of response costs is equitable.
We review de novo the grant of summary judgment by the district court and the dismissal of the section 113 claim. Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.1994); West v. Clarke Murphy, Jr. Self-Employed Pension Plan, 99 F.3d...
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