U.S. Tech. Corp. v. Miss. Dep't of Envtl. Quality
| Decision Date | 28 July 2016 |
| Docket Number | CIVIL ACTION NO. 5:15-cv-66(DCB)(MTP) |
| Parties | U.S. TECHNOLOGY CORPORATION, et al. PLAINTIFFS v. MISSISSIPPI DEPARTMENT OF ENVIRONMENTAL QUALITY, et al. DEFENDANTS |
| Court | U.S. District Court — Southern District of Mississippi |
This cause is before the Court on the Motion to Dismiss (docket entry 34) brought by defendant Richard Harrell ("Harrell") in his individual capacity; on the Motion to Dismiss (docket entry 36) brought by defendant Steven Bailey ("Bailey") in his individual capacity; and on the Motion for Preliminary Injunction (docket entry 53) brought by plaintiffs U.S. Technology Corporation and Raymond F. Williams. Having carefully considered the motions and responses, the memoranda of the parties and the applicable law, and being fully advised in the premises, the Court finds as follows:
Plaintiff U.S. Technology Corporation ("UST") and an entity known as Hydromex entered into a supply and recycle agreement on August 11, 2000. The Hydromex Agreement obligated Hydromex to recycle a material called "spent blast material" ("SBM") sent by UST to the Hydromex operation in Yazoo City, Mississippi. According to the plaintiffs' Amended Complaint, defendant Steven Bailey, an employee of defendant Mississippi Department of Environmental Quality ("MDEQ"), visited the Yazoo site from 2000- 2002. Shortly after Bailey's visits to the site began, MDEQ issued an order against Hydromex, and Hydromex was shut down in November of 2002. Thereafter, MDEQ and UST entered into an Agreed Order, and a series of Amendments to that Order, concerning the SBM at the Yazoo property. In 2008, UST also filed a lawsuit against Pat Ramsay and Delta Logging Company, Inc. ("Delta Logging").1 In the 2008 lawsuit, UST sought cost recovery and contribution from Ramsay and Delta Logging (the landowner of the subject property) for remediation and recycling costs related to the remaining waste at the Yazoo property, under the Federal Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"). The 2008 lawsuit was ultimately resolved through an agreement between UST and Ramsay, pursuant to which UST would continue operations as outlined in a 2011 Agreed Order between UST and MDEQ.
Two years later, in 2013, the plaintiffs maintain that they "petition[ed] the Court for relief" in the case between UST and Ramsay due to "intervening causes interfering with the completion of the settlement agreement between ... UST and Ramsay." Amended Complaint, ¶ 72. Thereafter, the plaintiffs contend that MDEQ sent UST a cease and desist letter concerning the SBM after test results "reported high cadmium results." Id., ¶¶ 88, 90. The plaintiffs contend that MDEQ's testing of the SBM was incorrect, that the plaintiffs' testing was accurate, and that the SBM is non-toxic.Id., ¶¶ 98-99. On July 14, 2015, the plaintiffs filed their original Complaint in the instant federal action, and subsequently filed an Amended Complaint on December 3, 2015.
There are two federal causes of action asserted against the individual defendants Harrell and Bailey in the Amended Complaint: Deprivation of Due Process Rights under 42 U.S.C. § 1983 (Count 8), and Violation of the Dormant Commerce Clause (Count 9). The plaintiffs' claims and the individual defendants' qualified immunity defenses must be viewed in conjunction with the series of agreed orders entered into between the plaintiffs and MDEQ. After the Hydromex operation was shut down in 2002, UST and MDEQ entered an Agreed Order and a series of Amendments, which are incorporated in and attached to the plaintiffs' Amended Complaint.
2003 Agreed Order: The first Agreed Order was entered into between UST and MDEQ in July of 2003. This original Order provides that UST "shipped to Hydromex much of the spent blast material ["SBM"] that has been received at and handled by Hydromex." Agreed Order, p. 1. The Agreed Order also states that the material "received by Hydromex was to be either nonhazardous or was to be handled and recycled in such a manner as to qualify the material for the 'recycling exclusion' from the definition of solid waste contained in 40 C.F.R. § 261.2(e)." Id. The Agreed Order further states that "much of the material received by Hydromex was handled in an improper manner." Id.
In addition, and pursuant to Commission Order No. 4510-02 issued against Hydromex, the 2003 Agreed Order explicitly set forth MDEQ's position on the material at issue in the instant litigation: "the Commission considers all of this material in its current condition or status to be solid or hazardous waste subject to regulation by Subtitles D and C of the Resource Conservation and Recovery Act ..., Miss. Code Ann. § 17-17-1 et seq., and the Mississippi Hazardous Waste Management Regulations (Regulation HW-1)." Agreed Order, p. 2. Through the original Agreed Order, UST sought "permission from the Commission to conduct operations at the Hydromex facility to recycle and remove the containerized material and the inadequately or improperly recycled material located at the Hydromex facility." Id. UST submitted to MDEQ "a comprehensive plan describing how [UST] proposes to handle the ... material ... at the Hydromex site in a manner that will render the material nonhazardous ...." Id., p. 3. The Agreed Order set forth that any "deviation from this plan must be approved in advance by the Commission." Id., pp. 3-4. The Agreed Order also made clear that "[n]othing ... shall limit the rights of MDEQ or the Commission in the event [UST] fails to comply with the Agreed Order," and that "[n]othing contained in this Agreed Order shall limit the rights of the Commission to take enforcement or other actions against [UST] ... for past, present, or future violations of environmental laws, rules, and regulations or for the creation or exacerbation of anypollution or contamination at the Hydromex facility." Id., p. 7.
2011 Agreed Order, First Amendment: In February 2011, UST sought to amend the original agreed order. Specifically, UST sought First Amendment (Doc. 28-4). Under this Amendment to the Agreed Order, UST was to "submit a Site Remediation Plan to MDEQ for approval" and upon MDEQ's request, UST was to "perform TCLP analyses on the blocks and report its results to MDEQ." Id. Similarly, under the agreed amendment, "[a]ll materials deemed by MDEQ to be non-recyclable" were to be "evaluated ... for appropriate disposition as determined by MDEQ" and any sampling results were to be provided to MDEQ, with MDEQ retaining the right to "take split samples." The 2011 amendment also provided as follows:
2013 Second Agreed Order Amendment: In June 2013, ten yearsafter the original agreed order, UST sought to amend again, and MDEQ agreed to provide "additional time to [UST] to remediate the [Hydromex] site." Second Amendment, p. 2. By the terms of the second agreed amendment, UST was provided until December 31, 2013 to "remediate the site" and UST was allowed "to utilize the processed SBM at the site as intermediate road base as approved by the Mississippi Department of Transportation." Id., pp. 2-3. This agreed order also outlined a process for sampling test results and stated that MDEQ "may take split samples." Id., pp. 4-5. Further, the second agreed order mandated that "[a]ny deviation from this Second Amendment to Agreed Order must be approved in advance in writing by MDEQ on behalf of the Commission." Id., p. 9.
In their Amended Complaint, the plaintiffs maintain that, on or about October of 2013, "MDOT informed Plaintiff Williams of UST that the project [discussed in the second agreed amendment] did not receive its funding and as such the project would not be going forward as planned." Amended Complaint, ¶ 56. Plaintiff Williams allegedly contacted Defendant Bailey from MDEQ and requested that UST be allowed to "move the remaining SBM down the street to store it until the MDOT funding was received or other arrangements could be made." Id., ¶ 58. According to the complaint, "Defendant Harrell directed Defendant Bailey to inform Plaintiff Williams that he could not store the SBM a mile down the road" and that the SBM needed to be removed by December 31, 2013 per the express languageof the agreed order. Id., ¶ 60.
Nevertheless, the plaintiffs then "entered into a contract with a recycling facility known as and referred to as MGM in Missouri" and "took measures to have the SBM moved to MGM," without receiving written approval from MDEQ as required by the 2013 agreed order amendment. Id., ¶¶ 66-67. The Amended Complaint alleges that "Plaintiff Williams had a conversation with Defendant Bailey and Attorney Roy Furrh from MDEQ about the shipments ...." Id., ¶ 70. The plaintiffs characterize MDEQ's direction for the plaintiffs to "cease all shipments to Missouri" as "arbitrary," despite the second agreed order amendment not being complied with by UST, and despite UST admitting to violating the second agreed order amendment in the third agreed order amendment.
2014 Third Agreed Order Amendment: In April 2014, MDEQ and UST entered into a third amendment to the original agreed order. In pertinent part, the agreement states:
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