SOLUTIA INC. v. McWANE INC.

• Decision Date: 02 July 2010
• Docket Number: Civil Action No. 1:03-cv-1345-PWG.
• Citation: 726 F.Supp.2d 1316
• Parties: SOLUTIA, INC. and Pharmacia Corporation, Plaintiffs, v. McWANE, INC., a/k/a Union Foundry, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

726 F.Supp.2d 1316

SOLUTIA, INC. and Pharmacia Corporation, Plaintiffs,

v.McWANE, INC., a/k/a Union Foundry, et al., Defendants.

Civil Action No. 1:03-cv-1345-PWG.

United States District Court, N.D. Alabama,Eastern Division.

July 2, 2010.

COPYRIGHT MATERIAL OMITTED.

Joseph G. Nassif, Husch, Blackwell, Sanders, LLP, St. Louis, MO, for Plaintiffs.

Jarred O. Taylor II, D. Bart Turner, E. Bryan Nichols, Maynard, Cooper & Gale, PC, Birmingham, AL, for BAE Systems Land & Armaments, LP and FMC Corporation.

J. Barton Seitz, Michael B. Heister, Baker Botts LLP, Washington, DC, for DII Industries, LLC.

Jack D. Shumate, Karen M. Pilat, Butzel Long, Bloomfield Hills, MI, John W. Scott, Kimberly W. Geisler, Scott Dukes & Geisler, PC, Birmingham, AL, for Huron Vally Steel Corp.

Steven G. McKinney, Michael D. Freeman, Balch & Bingham, Birmingham, AL, for McWane, Inc.

Wendlene M. Lavey, Squire, Sanders & Dempsey LLP, Cleveland, OH, for MeadWestvaco Corp.

Kevin A. Gaynor, Benjamin S. Lippard, Vinson & Elkins, LLP, Washington, DC, Lynne Stephens O'Neal, Leitmen, Siegal, Payne & Campbell, PC, Birmingham, AL, for Phelps Dodge Industries, Inc.

Douglas A. Henderson, Lynette Eaddy Smith, Jeffrey Hayward, Troutman, Sanders, Atlanta, GA, for Scientific-Atlanta, Inc.

Stacey H. Myers, Michael D. Goodstein, Hunsucker, Goodstein & Nelson, PC, Washington, DC, Mark T. Waggoner, Hand Arendall, Birmingham, AL, for Southern Tool LLC.

Douglas S. Arnold, Beverlee E. Silva, Alston & Bird LLP, Atlanta, GA, Alfred F. Smith, Jr., Bainbridge, Mims, Birmingham, AL, for United States Pipe & Foundry Co./Walter Energy.

MEMORANDUM OPINION

PAUL W. GREENE, United States Chief Magistrate Judge.

Before the court are motions to reconsider filed by defendants Huron Valley Steel Corporation; Walter Energy, Inc.; United States Pipe and Foundry Company, Inc.; McWane, Inc.; FMC Corporation; BEA Systems & Armaments, LP; DII Industries, LLC; MeadWestvaco Corporation; Phelps Dodge Industries, Inc.; Southern Tool LLC; and Scientific-Atlanta, Inc. (hereinafter the “Defendants”). (Docs. 542, 544, 546, 547, 548, 549, 550, 554, 558, & 581). The Defendants have moved for reconsideration of that portion of the court's memorandum opinion and order of June 10, 2008 (Docs. 397 & 398) that denied the defendants' motions for summary judgment on claims asserted by the plaintiffs, Solutia Inc. (“Solutia”) and Pharmacia Corporation (“Pharmacia”) (collectively “S/P”), to recover response costs under § 107(a)(4)(B) ¹ of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9607(a). The court held a hearing on the motions to reconsider on May 25, 2010. Upon consideration, the court concludes that the Defendants' respective motions to reconsider are due to be granted.

I. BACKGROUND A. PCB Contamination in Anniston

This case is complex, in terms of its underlying facts, its litigation history, and the legal issues it presents. From 1929 to 1971, Monsanto Company (“Monsanto”) and its predecessors produced polychlorinated biphenyls (“PCBs”) at a plant approximately one mile west of downtown Anniston, Alabama. (the “Anniston Plant”).

PCBs were widely used in industry for more than five decades because they are resistant to fire and are chemically inert, which means they do not readily react with other substances. These attributes made PCBs especially useful in safety fluids used to insulate and cool heavy duty electrical equipment, including transformers and capacitors. In the late 1960s, Monsanto learned that the same trait that made PCBs so attractive to industry-the fact that they do not react readily with other substances-also resulted in their persistence in the environment.

(Amended Complaint (hereinafter “Complaint” or “Compl.”), Doc. 86, ¶¶ 12, 13). Further, as noted in the court's prior summary judgment memorandum opinion, PCBs have been found

to cause cancer, decreased fertility, still births, and birth defects in test animals. Environmental Defense Fund v. Environmental Protection Agency, 636 F.2d 1267, 1270 (D.C.Cir.1980).... The EPA has noted the “well-documented human health and environmental hazard of PCB exposure” and the “potential hazard of PCB exposure posed by the transportation of PCBs.” 40 C.F.R. § 761.20. Indeed, PCBs pose such health and environmental dangers that the Toxic Substances Control Act bans the manufacturing of PCBs in this country without a special exemption from the EPA. 15 U.S.C. §§ 2605(e)(3)(A) & (B).

Dickerson, Inc. v. United States, 875 F.2d 1577, 1583 (11th Cir.1989). In 1997, Monsanto created Solutia in a spin-off transaction which now owns and operates the Anniston Plant. (Compl. ¶ 6). In 2000, Pharmacia was formed by the merger of Monsanto and Pharmacia & Upjohn, Inc. ( Id. ¶ 5).

B. The Removal Order

In June 1999, the United States Environmental Protection Agency (“EPA”) began sampling activities to assess PCB contamination related to prior operations at the Anniston Plant. Pursuant to its authority under CERCLA, EPA entered into an Administrative Order on Consent with Solutia, docket no. 01-02-C, effective October 27, 2000, (the “2000 Solutia AOC”), under which Solutia agreed to perform additional sampling and PCB cleanup activities in Anniston. The 2000 Solutia AOC was superceded by a second Administrative Order on Consent between EPA and Solutia, docket no. CER-04-2002-3752, which was effective on October 5, 2001. That second AOC, referred to hereinafter as the “Removal Order” (Doc. 330-4, Exhibit 1C to Plaintiff's Response in Opposition to Settling Defendants' Motion for Summary Judgment), generally provides for the performance of a “removal action” by Solutia and the reimbursement of oversight costs incurred by the United States in connection with contamination located on an area known as the “Anniston PCB Site” (Removal Order, § I), which is defined in the Removal Order as “consist[ing] of residential, commercial, and public properties located in and around Anniston, Calhoun County, Alabama that contain or may contain hazardous substances, including [PCB] impacted soil.” (Removal Order, § III, definition of “Site”). In outlining the work Solutia was to perform, the Removal Order acknowledged that the purposes of the “time critical removal order” it requires “are to determine the extent of PCBs, lead, and other hazardous substances” and “to conduct appropriate removal activities” in specific geographical areas designated as “Zones 1, 2, 3, 6 and ‘F’,” identified in an attached “Figure 1,” and as the “Oxford Lake Neighborhood (‘OLN’),” identified in an attached “Figure 2.” (collectively the “Removal Order Zones”). (Removal Order, § VI, ¶ 2.0). Under the Removal Order, Solutia was obligated to conduct surface soil sampling, as directed by EPA, at residential properties in the Removal Order Zones that had either not previously been sampled by EPA for PCBs or had undergone only limited data sampling. ( Id., § VI, ¶¶ 2.0(a)). Under the Removal Order's sampling regimen, Solutia was generally required to test for both PCBs and lead, notwithstanding that EPA had not determined that Solutia was a source of lead contamination in the Anniston area and that Solutia had expressly denied liability on that score. ( Id., § VI, ¶ 2.0(h)). Regardless of the scope of Solutia's sampling duties, however, the Removal Order required Solutia to take soil abatement measures based upon sampling results as they pertained only to the level of PCBs, not lead. More particularly, one of Solutia's primary abatement duties was to “conduct a removal response” at properties within the Removal Order Zones that prior or subsequent sampling either by EPA or by Solutia under the Removal Order indicated PCBs in surface soils at a concentration of 10 milligrams per kilogram (“mg/kg”) or greater. ( Id., § VI, ¶¶ 2.0(b), (c), & (d)). EPA generally covenanted in the Removal Order that, upon issuance of a notice acknowledging that Solutia had fulfilled its obligations thereunder, EPA would not sue Solutia for damages or civil penalties or take administrative action for any failure to perform. ( Id., § XIV). In addition, the parties acknowledged that Solutia was entitled to protection from contribution actions or claims to the extent provided by §§ 113(f)(2) and 122(h)(4).

C. The Enforcement Case

On March 25, 2002, the United States filed a CERCLA enforcement action in this court against both Solutia and Pharmacia for their activities and liability associated with the “Anniston PCB Site,” alleged in the complaint to “consist[ ] of [S/P]'s plant site, [and] residential and commercial properties located in and around Anniston, Alabama, that are suspected of containing PCB-contaminated soil and sediments.” ( United States v. Pharmacia Corp. et al., 1:02-cv-749-PWG (N.D.Ala.) (hereinafter the “Enforcement Case” or “Enf. Case”), Doc. 1 (“Enforcement Case Complaint” or “Enf. Case Compl.”) ¶¶ 1, 9). Invoking CERCLA §§ 104, 106, 107, 113 and 122, the government sought three types of relief. First, the government asked for an injunction requiring S/P to perform certain recovery actions, including a Remedial Investigation and Feasibility Study (“RI/FS”). ² (Enf. Case Compl., “First Claim for Relief” ¶¶ 21-24). Second, the government claimed entitlement to reimbursement for its own costs of response under § 107(a)(4)(A). ( Id., “Second Claim for Relief” ¶¶ 25-29). Finally, the government sought a declaratory judgment on S/P's liability for response costs that would be binding on any subsequent action or actions to recover further response costs or damages, as authorized under § 113(g)(2), 42 U.S.C. § 9613(g)(2). (Enf. Case Compl. “Prayer for Relief” ¶ 1).

Contemporaneously with the filing of the Enforcement Case Complaint, the United States submitted a proposed Partial Consent Decree entered into by the parties that would, if approved, settle certain claims identified in the Enforcement Case Complaint. (Enf. Case, ...