Taylor Farm Ltd. Liability Co. v. Viacom Inc.

• Decision Date: 24 December 2002
• Docket Number: No. IP01-1734 C-M/S.,IP01-1734 C-M/S.
• Citation: 234 F.Supp.2d 950
• Parties: TAYLOR FARM LIMITED LIABILITY COMPANY, Plaintiff, v. VIACOM INC., Defendant.
• Court: U.S. District Court — Southern District of Indiana

Page 950

234 F.Supp.2d 950

TAYLOR FARM LIMITED LIABILITY COMPANY, Plaintiff, v. VIACOM INC., Defendant.

No. IP01-1734 C-M/S.

United States District Court, S.D. Indiana, Indianapolis Division.

December 24, 2002.

Thomas Barnard, Sommer & Barnard, Indianapolis, IN, for Plaintiff.

Kenneth K. Kilbert, Babst Calland Clements and Zomnir, Pittsburgh, PA, Brent D. Taylor, Baker & Daniels, Indianapolis, IN, for Defendant.

ORDER ON MOTION FOR SUMMARY JUDGMENT

McKINNEY, Chief Judge.

This matter comes before the Court on a motion for summary judgment by the Defendant, Viacom Inc. ("Viacom"). Viacom asks this Court to find that the complaint filed by the Plaintiff, Taylor Farm, L.L.C. ("Taylor"), under the Indiana Environmental Legal Action statute ("IELA") is barred by the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").

The gist of Viacom's argument is that: because it entered into a court-approved comprehensive settlement agreement (the "Settlement Agreement," also referred to by the parties as the "Consent Decree") with the Environmental Protection Agency ("EPA"), requiring it to clean up the hazardous waste site known as Neal's Landfill, it cannot be subject to further lawsuits in state or federal court, seeking to force it to perform or pay for further cleanup activities. Viacom invokes two clauses of CERCLA, arguing alternatively that section 113(f)(2) of CERCLA (hereinafter, the "contribution bar") prevents Taylor from making a "contribution" claim against Viacom, or that section 113(h) of CERCLA (hereinafter, the "jurisdiction bar") prevents this Court from exercising jurisdiction over Taylor's claim.

Taylor, on the other hand, argues that, because it did not contribute in any way to the original contamination of Neal's Landfill, it is not suing Viacom for contribution, but rather for damages to its land. Taylor further points out that it is not seeking additional cleanup at the specific site, Neal's Landfill, which was the subject of the Settlement Agreement. Rather, it is seeking the cleanup of property located downstream from Neal's Landfill, subsequently contaminated by the PCBs that Viacom disposed of in Neal's Landfill.

For the reasons discussed below, the Court finds that there is a question of fact as to whether Taylor is an "innocent landowner." If innocent, Taylor's claim cannot be characterized as a contribution claim and therefore the claim is not subject to the contribution bar. The Court further finds, as a matter of law, that the jurisdiction bar only applies to federal claims or state law claims that really constitute a backdoor attack on a CERCLA settlement agreement. There is no evidence that Taylor's lawsuit was intended to prevent or delay the implementation of Viacom's Settlement Agreement, nor that it would be likely to have that effect. And, to the extent that Taylor's claim is like a federal claim, it most closely resembles a so-called "cost recovery" claim under section 107(a) of CERCLA. Such claims are explicitly exempted from CERCLA's jurisdiction bar. Therefore, the Court DENIES the Defendant's motion for summary judgment.

I. FACTS AND PROCEDURAL POSTURE

The facts in the light most favorable to Taylor are these:

Taylor, whose sole proprietor is Craig Taylor ("C. Taylor"), owns 179 acres of land (the "Taylor Farm") in Monroe County, Indiana, just a few miles west of Bloomington. Affidavit of Craig Taylor ("C. Taylor Aff.") ¶ 2; Complaint, ¶¶ 1, 7. About 40 acres originally belonged to C. Taylor's grandfather, Chester Taylor, who used that parcel to grow hay and raise cattle. Deposition of C. Taylor ("C. Taylor Dep."), tab 4 at 42-3.

The remaining 139 acres, hereinafter the "Neal Parcel", was acquired from Richard Neal ("Neal") in 1977¹ by C. Taylor's parents, William Taylor ("Wm. Taylor") and Wanda Taylor ("W. Taylor"), together with two other investors.² Complaint, ¶ 9; Tab F, Ex. 6; Viacom's Reply to Plaintiff's Response to Defendant's Statement of Material Facts (hereinafter "Facts"), ¶ 2. At the time of the purchase, both Wm. Taylor and W. Taylor knew that Neal had been using an 18-acre portion of his property as a solid waste landfill ("Neal's Landfill."). Complaint, ¶ 10. However, there is no evidence that they knew about any hazardous wastes having been deposited in the landfill.

In the late 1960's Viacom, through its predecessor company, Westinghouse Electric Corporation (hereinafter, collectively referred to as "Viacom"), operated a facility in Bloomington which manufactured electrical capacitors. Deposition of Stephen Wardzinski ("Wardzinski Dep."), Tab 8 at 11, 14, 16-7. The plant generated a substantial amount of Polychlorinated Biphenyl ("PCB") contaminated waste (of a type known as "inerteen"). Id. at 11; Tab 9 at 2. For a period from approximately 1966-1968, Viacom contracted with Neal to dispose of such waste—including sawdust, rags, a clay material called fuller's earth, and a large number of rejected capacitors and capacitor parts—in Neal's landfill. Id. In a letter dated October 1, 1968, Viacom instructed Neal that "[i]t is permissible to dump inerteen ... out of containers in the approved location so long as the liquid dumped soaks completely into the ground leaving no pools." Tab 10. Viacom further instructed: "When the ground is saturated, the location must be backfilled to a minimum depth of one foot." Id. Viacom did not instruct Neal to make any further effort to contain the PCB's at the site. Id.

The groundwater that flows beneath Neal's Landfill ultimately resurfaces at a location known as "Northwest Springs," which consists of two primary springs known as "North Spring" and "South Spring." Complaint ¶ 22. Taylor contends that PCBs have migrated to the Northwest Springs, and thence downstream to Conard's Branch and ultimately to Richland Creek. Complaint, ¶¶ 22-4. The Northwest Springs and the uppermost portion of Conard's Branch are located on Taylor Farm. Viacom's Statement of Material Facts ("D. Facts") ¶ 13.

In 1981, the United States EPA wrote to Wm. Taylor, as owner of the Neal's Landfill, informing him that "there is a substantial threat of discharge of Polychlorinated Biphenyls (PCB's), a hazardous substance, from Neal's Landfill into tributaries of Richland Creek." The EPA further stated that its policy is "to request the owner or operator ... or party responsible ... to accept responsibility to abate the threat." Tab F, C. Taylor Dep., Ex. 16. The EPA then noted that it has the authority, "pursuant to 33 U.S.C. 1321(c)(1)" to initiate action to hold "[t]he owner or operator or party responsible ... liable for the costs of the remedial actions" necessary. Id.

In 1982, the EPA wrote to Wm. Taylor that it "has determined that there have been and continue to be actual releases of a hazardous substance, i.e. [PCB's] at the Neal's landfill site, which you own," and that it "may also undertake such remedial measures as are indicated." Tab F, C. Taylor Dep., Ex. 18. The EPA further noted that "under the law, federal costs incurred in this manner may be recovered in a civil suit from ... the owner of the site from which a hazardous substance is released." Id.

In early 1983, the United States and the State of Indiana sued Viacom under the CERCLA, seeking to force Viacom to clean up the PCB wastes it deposited at Neal's Landfill. D Facts, ¶ 17. Not long thereafter, the EPA declared Neal's Landfill a federal Superfund site. 48 Fed.Reg. 40670, 40672 (Sept. 8, 1983).

During the same year, Wm. Taylor acquired the interests of his wife and the other two investors, becoming the sole owner of Taylor Farm. D. Facts, ¶ 5. Following his death in 1997, the property then passed to his widow, W. Taylor. D. Facts, ¶ 6. Taylor LLC acquired ownership in 1998. Id.

In 1985, Viacom entered into a Settlement Agreement with the EPA, addressing PCB contamination at Neal's Landfill and five other related sites. Viacom Ex. B. The Agreement required Viacom to take the following remedial response actions affecting Taylor Farm:

1) Excavate and incinerate waste from a defined area of Neal's Landfill. Viacom Ex. B, ¶¶ 42-6 2) Remove and incinerate PCB-contaminated soils and sediments from Conard's Branch and a portion of Richland Creek. Id., ¶ 51.

3) Construct and operate a facility to treat groundwater flowing from the North and South Springs to reduce PCB levels before the water enters Conard's Branch. Id., ¶ 59(a).

The Settlement Agreement further required Viacom to submit plans to "close" the landfill site following the excavation. Id., ¶ 52. After closure, Viacom was to sample sediments from various locations on Richland Creek and Conard's Branch, to determine whether the sediments in any given area contained excessive amounts of PCBs. Id., ¶¶ 51(g)(1), 51(c), 51(g)(3).³ If so, the Agreement further required Viacom to remove the contaminated sediment, Id., ¶ 51(g)(1), and incinerate it. Id., ¶ 51(h). The amounts to be incinerated were not to exceed 1,100 cubic yards from Richland Creek and 900 cubic yards from Conard's Branch. Id., ¶ 51(g)(3).

The Consent Decree also included a Covenant Not to Sue. Id., ¶ 111. "[C]onditioned only upon compliance by [Viacom] with the provisions of this Decree and subject to the reservation of rights set forth in [§ 111(e)]," the United States, City, and County "[undertake] not to assert against [Viacom] ... any claim arising under federal, state or local law, including common law, intended to protect the environment ... [which] result[s] from or relat[es] to: (1)[t]he past disposal or discharge of PCBs or materials contaminated with PCBs at [Neal's Landfill] ...; (2)[t]he release or threatened release of PCBs or materials contaminated with PCBs from [Neal's Landfill] ...; [and] (5)[a]ctivities which [Viacom] performs in compliance with this Consent Decree ..., excluding the performance of activities in a manner which violates standards of care required by applicable federal, state, or...