State of Idaho v. Bunker Hill Co., Civ. No. 83-3161

• Decision Date: 07 May 1986
• Docket Number: Civ. No. 83-3161,84-3071 and 84-1155.
• Court: U.S. District Court — District of Idaho
• Parties: The STATE OF IDAHO, Plaintiff, v. The BUNKER HILL COMPANY, a Delaware corporation; Pintlar Corporation, a Delaware corporation; Gulf Resources & Chemical Corporation, a Delaware corporation; and John Does 1 to 500, Defendants. GULF RESOURCES & CHEMICAL CORPORATION, Third-Party Plaintiff, v. The AETNA CASUALTY AND SURETY COMPANY and the Home Indemnity Company, Third-Party Defendants. GULF RESOURCES & CHEMICAL CORPORATION, and Pintlar Corporation, Third-Party Plaintiffs, v. The FIDELITY AND CASUALTY COMPANY OF NEW YORK; Pacific Insurance Company; Continental Re-Insurance Corporation; First State Insurance Company; Northwestern National Insurance Company, Northwestern National Casualty Company; Admiral Insurance Company; the Insurance Company of the State of Pennsylvania; and Pacific Indemnity Company (CHUBB), Third-Party Defendants. PINTLAR CORPORATION, Third-Party Plaintiff, v. UNDERWRITERS AT LLOYD'S, LONDON, Third-Party Defendant. AETNA CASUALTY AND SURETY COMPANY, Third-Party Plaintiff, v. FIRST STATE INSURANCE COMPANY, Northwestern National Insurance Company, and Northwestern National Casualty Company, Third-Party Defendants. CONTINENTAL RE-INSURANCE CORPORATION, a California corporation; Pacific Insurance Company, a California corporation; and Fidelity & Casualty Company of New York, a New York corporation, Third-Party Plaintiffs, v. FIRST STATE INSURANCE COMPANY, Northwestern National Insurance Company, and Northwestern National Casualty Company, Third-Party Defendants. PINTLAR CORPORATION, Third-Party Plaintiff, v. INSURANCE COMPANY OF NORTH AMERICA, Third-Party Defendant. AETNA CASUALTY & SURETY CO., a corporation, Plaintiff, v. GULF RESOURCES & CHEMICAL CORPORATION, a Delaware corporation; the Bunker Hill Company, a Delaware corporation; Pintlar Corporation, a Delaware corporation, Defendants. CONTINENTAL RE-INSURANCE CORPORATION, a California corporation; Pacific Insurance Company, a California corporation; Fidelity & Casualty Company of New York, a New York corporation; and Northbrook Insurance Company, an Illinois corporation, Plaintiffs, v. The BUNKER HILL COMPANY, a Delaware corporation; and Gulf Resources & Chemical Corporation, a Delaware corporation, Defendants.

634 F. Supp. 800

The STATE OF IDAHO, Plaintiff, v. The BUNKER HILL COMPANY, a Delaware corporation; Pintlar Corporation, a Delaware corporation; Gulf Resources & Chemical Corporation, a Delaware corporation; and John Does 1 to 500, Defendants.

GULF RESOURCES & CHEMICAL CORPORATION, Third-Party Plaintiff, v. The AETNA CASUALTY AND SURETY COMPANY and the Home Indemnity Company, Third-Party Defendants.

GULF RESOURCES & CHEMICAL CORPORATION, and Pintlar Corporation, Third-Party Plaintiffs, v. The FIDELITY AND CASUALTY COMPANY OF NEW YORK; Pacific Insurance Company; Continental Re-Insurance Corporation; First State Insurance Company; Northwestern National Insurance Company, Northwestern National Casualty Company; Admiral Insurance Company; the Insurance Company of the State of Pennsylvania; and Pacific Indemnity Company (CHUBB), Third-Party Defendants.

PINTLAR CORPORATION, Third-Party Plaintiff, v. UNDERWRITERS AT LLOYD'S, LONDON, Third-Party Defendant.

AETNA CASUALTY AND SURETY COMPANY, Third-Party Plaintiff, v. FIRST STATE INSURANCE COMPANY, Northwestern National Insurance Company, and Northwestern National Casualty Company, Third-Party Defendants.

CONTINENTAL RE-INSURANCE CORPORATION, a California corporation; Pacific Insurance Company, a California corporation; and Fidelity & Casualty Company of New York, a New York corporation, Third-Party Plaintiffs, v. FIRST STATE INSURANCE COMPANY, Northwestern National Insurance Company, and Northwestern National Casualty Company, Third-Party Defendants.

PINTLAR CORPORATION, Third-Party Plaintiff, v. INSURANCE COMPANY OF NORTH AMERICA, Third-Party Defendant.

AETNA CASUALTY & SURETY CO., a corporation, Plaintiff, v. GULF RESOURCES & CHEMICAL CORPORATION, a Delaware corporation; the Bunker Hill Company, a Delaware corporation; Pintlar Corporation, a Delaware corporation, Defendants.

CONTINENTAL RE-INSURANCE CORPORATION, a California corporation; Pacific Insurance Company, a California corporation; Fidelity & Casualty Company of New York, a New York corporation; and Northbrook Insurance Company, an Illinois corporation, Plaintiffs, v. The BUNKER HILL COMPANY, a Delaware corporation; and Gulf Resources & Chemical Corporation, a Delaware corporation, Defendants.

Civ. Nos. 83-3161, 84-3071 and 84-1155.

United States District Court, D. Idaho.

May 7, 1986.

Jim Jones, Atty. Gen., State of Idaho, P. Mark Thompson, Deputy Atty. Gen., Chief, Sheila Glusco Bush, Deputy Atty. Gen., Administrative Law & Litigation Div., Boise, Idaho, for State of Idaho.

William F. Boyd, Fred M. Gibler, Charles L.A. Cox, Evans Keane Koontz Boyd & Ripley, Kellogg, Idaho, James P. Keane, Evans Keane Koontz Boyd & Ripley, Coeur d'Alene, Idaho, for Bunker Hill, Pintlar and Gulf Resources.

R.B. Kading, Jr., Scott D. Hess, Warren Jones, Eberle Berlin Kading Turnbow & Gillespie, Boise, Idaho, for Pacific Indem. and Aetna Cas.

R.B. Rock, Robert B. Luce, Kristi Emig-Mark, Moffatt Thomas Barrett & Blanton, Boise, Idaho, for Home Indem. Co.

John P. Howard, Marc A. Lyons, Quane Smith Howard & Hull, Boise, Idaho, for Fidelity & Cas., Pacific Ins., Continental Re-Insurance and Northbrook Ins.

Richard C. Mellon, Jr., D. Alan Kofoed, Elam Burke & Boyd, Boise, Idaho, for First State Ins., Northwestern Nat. Ins. and Northwestern Nat. Cas.

Howard Humphrey, Clemons Cosho & Humphrey, Boise, Idaho, Frank R. Morrison, Jr., Bassett & Morrison, Seattle, Wash., for The Ins. Co. of Pennsylvania.

James B. Lynch, Scott W. Marotz, Charles R. Clark, Imhoff & Lynch, Boise, Idaho, for Admiral Ins.

James P. Barber, Ray L. Wong, William J. Casey, Hancock Rothert & Bunshoft, San Francisco, Cal., Gardner W. Skinner, Jr., Robert D. Lewis, Cantrill Skinner Sullivan & King, Boise, Idaho, for Underwriters at Lloyd's, London-Jervois.

MEMORANDUM OPINION AND ORDER

RYAN, District Judge.

I. INTRODUCTION

On May 1, 1986, the court held a hearing on the sixty-day notice issue raised pursuant to CERCLA provision Section 112(a), 42 U.S.C. § 9612(a). At the request of the parties, the court determined to hear this issue apart from all other issues pending in this matter since it carries jurisdictional overtones. All parties were represented by respective counsel. After taking the matter under advisement, the court hereby submits this memorandum opinion and order.

II. ANALYSIS

The defendants contend that the sixty-day notice condition contained in CERCLA Section 112(a) is a condition which must be satisfied as a jurisdictional prerequisite to suits under Section 107. The plaintiff contends that Section 112(a) is only applicable to claims made pursuant to Section 111 and not to suits brought pursuant to Section 107, and is, in any event, not a jurisdictional prerequisite.

CERCLA provision Section 112(a), 42 U.S.C. § 9612(a), reads:

All claims which may be asserted against the Fund pursuant to section 111 of this title 42 U.S.C. § 9611 shall be presented in the first instance to the owner, operator, or guarantor of the vessel or facility from which a hazardous substance has been released, if known to the claimant, and to any other person known to the claimant who may be liable under section 107 of this title 42 U.S.C. § 9607. In any case where the claim has not been satisfied within sixty days of presentation in accordance with this subsection, the claimant may elect to commence an action in court against such owner, operator, guarantor or other person or to present the claim to the Fund for payment.

The State has acknowledged that it did not send a notice of claim to the defendant sixty days prior to filing its Complaint. It is undisputed that the State mailed a notice to the defendants on December 8, 1983, the day before the Complaint was filed.

The court's analysis with respect to the applicability of this section to a claim under Section 107 must begin with the language of the statute. Section 107 provides a cause of action against responsible owners or operators and Section 111 provides a mechanism for relief against the Fund. It should be noted, then, that Section 112 follows the section dealing with a claim against the Fund and not the section which grants a cause of action against an owner or operator. The court recognizes, however, that Section 112(d) contains the statute of limitations applicable to all provisions under CERCLA and, thus, Section 112 is not wholly independent of Section 107. See State of Colorado v. ASARCO, Inc., 616 F.Supp. 822, 824-25 (D.Colo.1985).

The first sentence of Section 112(a) states that any claims which may be asserted against the Fund pursuant to Section 111 must first be presented to potentially liable private parties. In analyzing this sentence, the court has determined that the word "may" refers not to the possibility of a claim against the Fund, but rather, refers to claims which are allowed to be made against the Fund by virtue of Section 111. Further, this first sentence only deals with claims made against the Fund pursuant to Section 111. If Congress had intended the sixty-day requirement to apply to Section 107 causes of action, it very easily could have included in the first sentence after "pursuant to section 111," the clarifying phrase, "or section 107." With that simple addition of a reference to Section 107, Congress could have expressly included the sixty-day notice requirement to claims against the Fund and claims against potentially liable parties. It did not.

The second sentence of Section 112(a) states that, "in any case where the claim has not been satisfied within sixty days of presentation in accordance with this subsection," a claim may be made against potentially liable parties in court or against the Fund. The phrase, "in any case," is limited internally by "subsection." As noted above, subsection 112(a) refers only to claims made pursuant to Section 111, and therefore, the phrase "in any case" cannot be read to expand the subsection to include claims made pursuant to Section 107. For a discussion regarding the legislative history which supports this interpretation see State of Colorado v. ASARCO, Inc., 616 F.Supp. 822, 826 (D.Colo.1985). The Senate Report to Senate Bill 1480, discussing the procedure under Section 112(a), makes reference to notice in "all instances ... prior to pursuing any rights under this section." S.Rep.No. 848, 96th Cong., 2d Sess. 81 (1980). The language used in the Senate Report is consistent with the above analysis.

The court is aware of eight federal district court cases which bear directly on this issue. Apparently, there are no federal appellate decisions dealing with the notice requirement provision in Section 112(a). A brief analysis of those cases is appropriate.

In Dedham Water Co. v. Cumberland Farms Dairy, Inc., 588 F.Supp. 515 (D.Mass.1983), the court concluded, without statutory or legislative history analysis, that Section 112 requires a demand upon potentially responsible parties at least sixty days before commencing suit under Section 107. The court, however, held that the plaintiff constructively complied with the notice requirement since the defendant was aware of the discharges that had occurred and that sixty days had passed and no action had been taken since the notice of intent to sue was given on the same day the original Complaint was filed. The Dedham court did not address the question of whether the sixty-day notice requirement was jurisdictional. The court merely stated that the plaintiff must make a demand sixty days prior to filing suit, but then allowed for substantial compliance.

In United States v. Allied Chemical Corp., 587 F.Supp. 1205 (N.D.Calif.1984), the court concluded that: "42 U.S.C. section 9612(a) requires `all claimants' to first make a claim in writing to the responsible party before instituting court action or presenting a claim to the Fund for payment." Id. at 1207. This court notes that the phrase "all claimants" is not used in Section 112(a), and therefore, the Allied court may have misread this...