SPS Ltd. P'ship v. Severstal Sparrows Point, LLC

• Decision Date: 05 July 2011
• Docket Number: Civil No. JFM–10–2579.
• Citation: 74 ERC 1275,808 F.Supp.2d 794
• Parties: SPS LIMITED PARTNERSHIP, LLLP, et al., Plaintiffs, v. SEVERSTAL SPARROWS POINT, LLC, et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

74 ERC 1275

808 F.Supp.2d 794

SPS LIMITED PARTNERSHIP, LLLP, et al., Plaintiffs,

v.SEVERSTAL SPARROWS POINT, LLC, et al., Defendants.

Civil No. JFM–10–2579.

United States District Court, D. Maryland.

July 5, 2011.

Catherine A. Bledsoe, Margaret M. Witherup, Gordon Feinblatt Rothman Hoffberger and Hollander LLC, Baltimore, MD, for Plaintiffs.

Edward J. Longosz, II, Mark A. Johnston, Eckert Seamans Cherin and Mellott LLC, Amy L. Brown, Squire Sanders and Dempsey LLP, Washington, DC, Andrew Etter, Vincent Atriano, Squire Sanders and Dempsey LLP, Columbus, OH, Dale E. Papajcik, William Vere Shaklee, Squire Sanders and Dempsey LLP, Cleveland, OH, for Defendants.

OPINION

J. FREDERICK MOTZ, District Judge.

Plaintiffs SPS Limited Partnership, LLLP (“SPS LLLP”), and SPS 35, LLC (“SPS 35”) are the owners of the Sparrows Point Shipyard located in Sparrows Point, Baltimore County, Maryland (the “Shipyard Site”). Plaintiffs bring this action against Defendants, Severstal Sparrows Point LLC, a/k/a Severstal North America (“Severstal”) and ArcelorMittal USA Inc. (“ArcelorMittal”) for violations of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901, et seq. ; the Comprehensive Environmental Response, Compensation and Liability Act, as amended (“CERCLA”), 42 U.S.C. § 9601, et seq. ; and Maryland common law. Plaintiffs seek to recover cleanup and other response costs, to obtain contribution from the Defendants, to obtain declaratory relief as to liability for future response costs pursuant to CERCLA, 42 U.S.C. § 9607(a), to require Defendants to take all actions necessary to eliminate the imminent and substantial endangerment to health and the environment pursuant to RCRA, and to recover damages pursuant to Maryland common law.

Now pending are ArcelorMittal's and Severstal's Motions to Dismiss, pursuant to Federal Rules of Civil Procedure 12(b)(1), claiming a lack of subject matter jurisdiction, and Rule 12(b)(6), claiming that Plaintiffs have failed to state a claim against Defendants on which relief can be granted. I have reviewed the papers, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2010). As to Count I (CERCLA cost recovery) and Count II (CERCLA declaratory judgment), Defendants' Motions to Dismiss are denied. As to Count III (RCRA), Defendants' Motions to Dismiss are granted, except that they are denied insofar as Plaintiffs state a narrow claim for post–2003 contribution to disposal of hazardous substances migrating to the Shipyard Site after 2006. As to Count IV (negligence), Count V (trespass), Count VI (nuisance), and Count VII (strict liability), Defendants' Motions to Dismiss are granted.

I. Factual Background

The Shipyard Site was developed around 1880 and is comprised of approximately 131.5 acres of dry land, with a 13.4 acre excavated shore dry dock (the “Graving Dock”). (Compl. ¶ 17.) The Graving Dock, constructed in 1969, is flooded in order to bring ships into the dock, and then can be pumped dry to facilitate repair, maintenance or construction work on ships. ( Id.) The Shipyard Site is adjacent to and surrounded on three sides by the Sparrows Point steel mill (the “Steel Mill Site”), which has been in operation for over 100 years. ( Id. ¶ 3.) The Shipyard Site and Steel Mill Site were both owned by Bethlehem Steel Corporation (“BSC”) at one time.

In 1997, the Environmental Protection Agency (“EPA”) and Maryland Department of the Environment (“MDE”) brought an action against BSC for violations of RCRA and corresponding state law, which the parties settled by executing a Consent Decree, entered in this Court on October 8, 1997.¹ ( Id. ¶¶ 19–20.) Under the Consent Decree, BSC agreed to investigate and address certain environmental conditions at both the Shipyard Site and Steel Mill Site. ( Id. ¶ 20.) BSC sold the Shipyard Site to Baltimore Marine on September 30, 1997, after the Consent Decree was lodged in February 1997, but before the Consent Decree was entered in this Court in October 1997. (Severstal Mot. to Dismiss 11.) Plaintiff SPS LLLP bought the Shipyard Site on March 4, 2004, and Plaintiff SPS 35 acquired a minority ownership interest in the Shipyard Site on or about June 8, 2006. (Compl.¶ 16.) Shortly before SPS LLLP purchased the Shipyard Site in 2004, it submitted an application to MDE to participate in the Maryland Voluntary Cleanup Program (“VCP”), a Maryland program that allows owners of contaminated property to remediate the contamination under state supervision and receive limited liability protection upon completion of remediation. ( See Severstal Mot. to Dismiss 11.) On June 15, 2006, EPA approved the removal of the Shipyard Site from the Consent Decree.² (Compl. ¶ 21.)

When Plaintiffs acquired the Shipyard Site, they inherited an NPDES permit ³ that had been in draft form for a number of years. ( Id. ¶ 31.) The NPDES permit included a benzene limit associated with the dewatering/trim pumps at the Graving Dock.⁴ ( Id.) In 2007, MDE informed Plaintiffs that the benzene requirement in the NPDES permit should have been associated with the underdrain pumps, rather than the dewatering/trim pumps, and asked Plaintiffs to sample for benzene at the underdrain pumps. ( Id. ¶ 32.) In January 2009, Plaintiffs and MDE finalized a revised NPDES permit with a new benzene requirement at the underdrain pumps to become effective on February 1, 2010. ( Id. ¶ 34.) In order to comply with the new benzene requirement in the NPDES permit, Plaintiffs have installed a wastewater treatment system designed to remove benzene at the Graving Dock. ( Id. ¶ 35.) Plaintiffs claim that the cost of installing and operating the wastewater treatment system has amounted to more than $700,000 and is expected to cost an additional $20,000 per month in operating and maintenance costs. ( Id. ¶ 36.)

II. Procedural Background

On September 5, 2008, Plaintiffs and Defendants entered into a Tolling Agreement, which tolled and suspended any limitations periods set forth in any statute of limitations applicable to any claims Plaintiffs possessed against Defendants as of August 28, 2008. (Compl. ¶ 8.) On May 11, 2010, after negotiations to resolve this dispute out of court proved unsuccessful, Plaintiffs provided written notice of their intent (“NOI”) to bring this action, as required by section 7002(b)(2)(A) of RCRA, 42 U.S.C. § 6972(b)(2)(A) (requiring a citizen give notice of its intent to sue to the EPA Administrator, the State in which the violations are alleged to have occurred, and the alleged violator ninety (90) days prior to the initiation of a civil action), and section 310(d)(1) of CERCLA, 42 U.S.C. § 9659(d)(1) (requiring a citizen give notice of its intent to sue to the President, the State in which the violations are alleged to have occurred, and the alleged violator sixty (60) days prior to the initiation of a civil action). ( Id. ¶ 9.) Plaintiffs filed this action on September 17, 2010, more than 90 days after the NOIs were given. ( Id. ¶ 9.) Defendant ArcelorMittal filed its Motion to Dismiss on November 29, 2010, Defendant Severstal filed its Motion to Dismiss on December 3, 2010. Plaintiffs' opposition and Defendants' replies were filed in a timely manner.

III. Statutory Background

RCRA is a comprehensive environmental statute that governs the treatment, storage, and disposal of solid and hazardous waste. See Chicago v. Envtl. Def. Fund, 511 U.S. 328, 331–32, 114 S.Ct. 1588, 128 L.Ed.2d 302 (1994). RCRA's primary purpose is to “reduce the generation of hazardous waste and to ensure the proper treatment, storage, and disposal of that waste which is nonetheless generated....” Meghrig v. KFC W., Inc., 516 U.S. 479, 483, 116 S.Ct. 1251, 134 L.Ed.2d 121 (1996). Citizens are permitted to bring private suits under RCRA in certain circumstances, but the “chief responsibility for the implementation and enforcement of RCRA rests with the Administrator of the Environmental Protection Agency.” Id. at 483–84, 116 S.Ct. 1251 (citing 42 U.S.C. § 6902(b)). Section 3006 of RCRA, 42 U.S.C. § 6926, allows the states to develop hazardous waste programs at least as stringent as RCRA, subject to authorization by the Administrator of the EPA. After receiving authorization, the state may implement its hazardous waste program “in lieu of the Federal program.” 42 U.S.C. § 6926(b). Maryland has received final authorization for its hazardous waste program. See 50 Fed.Reg. 3511 (Jan. 25, 1985) (as revised by 69 Fed.Reg. 44463 (July 26, 2004)).

Congress enacted CERCLA “in response to the serious environmental and health risks posed by industrial pollution. The Act was designed to promote the timely cleanup of hazardous waste sites and to ensure that the costs of such cleanup efforts were borne by those responsible for the contamination.” Burlington N. & Santa Fe Ry. v. United States, 556 U.S. 599, 129 S.Ct. 1870, 1874, 173 L.Ed.2d 812 (2009) (internal quotations and citations omitted). By permitting private individuals to recover specified costs of cleanup from those parties responsible for environmental hazards, CERCLA encourages private individuals to remediate those hazards. Westfarm Assocs. Ltd. P'shp. v. Washington Suburban Sanitary Comm'n, 66 F.3d 669, 677 (4th Cir.1995). CERCLA was passed several years after RCRA went into effect, and CERCLA addresses many of the same toxic waste problems as RCRA. “CERCLA differs markedly from RCRA, however, in the remedies it provides.” Meghrig, 516 U.S. at 485, 116 S.Ct. 1251. CERCLA's citizen suit provision mirrors RCRA's citizen suit provision in providing district courts with the authority “to order such action as may be necessary to correct the violation” of any CERCLA standard or regulation. 42 U.S.C. § 9659(c). CERCLA is distinct from RCRA, however, in that it expressly permits the Government to recover “all costs of removal or remedial action,” § 9607(a)(4)(A), and it expressly permits the recovery of any “necessary costs of response,...