U.S. v. Alcan Aluminum Corp.

• Decision Date: 01 May 2000
• Docket Number: No. 91-CV-1132.,No. 87-CV-920.,87-CV-920.,91-CV-1132.
• Citation: 97 F.Supp.2d 248
• Parties: UNITED STATES of America, and The State of New York, Plaintiffs, v. ALCAN ALUMINUM CORPORATION, et al., Defendants.
• Court: U.S. District Court — Northern District of New York

97 F.Supp.2d 248

UNITED STATES of America, and The State of New York, Plaintiffs, v. ALCAN ALUMINUM CORPORATION, et al., Defendants.

No. 87-CV-920.

No. 91-CV-1132.

United States District Court, N.D. New York.

May 1, 2000.

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United States Department of Justice, Environmental & Natural Resources Division, Washington, D.C. (Steven R. Baer, Henry S. Friedman, Peter Flynn, Mark Gallagher, of counsel), for United States.

Office of Attorney General, State of New York, Albany, NY (David A. Munro, Asst. Atty. Gen., of counsel), for State of New York.

Alcan Aluminum Corporation, Mayfield Heights, OH (Lawrence A. Salibra, II, John C. Tillman, of counsel), for Defendant.

MEMORANDUM—DECISION & ORDER

McAVOY, District Judge.

I. Procedural History

On June 10, 1987, the United States of America and the State of New York (collectively "the government") initiated an action against 83 business entities to recover response costs pursuant to Section 107 of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") as amended, 42 U.S.C. § 9601, et seq., in connection with the clean-up costs of a hazardous waste site formerly owned by Pollution Abatement Services of Oswego, Inc. ("PAS"). Shortly after commencement of that action, the government entered into a consent decree with 82 of the defendants, recovering approximately $9.1 million of the approximately $12.3 million in response costs incurred through April 1, 1987. The present litigation proceeded against Alcan Aluminum Corporation ("Alcan"), the only nonsettling defendant.

In February 1988, Alcan commenced a third-party action against Cornell University ("Cornell"). That action sought a declaration that Cornell was jointly and severally liable for the response costs incurred by the government relative to PAS and an order directing Cornell to contribute its fair share of the costs.

In January of 1991, this Court granted summary judgment in favor of the government, holding Alcan jointly and severally liable for approximately $4 million in response costs at PAS. See United States v. Alcan, 755 F.Supp. 531 (N.D.N.Y.1991) ("Alcan-PAS"). The Court also granted Alcan's motion against third-party defendant, Cornell, and found that a hearing was necessary to determine Cornell's fair share of response costs. See id.

On November 19 and 20, 1991, the Court held a hearing to determine Cornell's fair share of the response costs incurred by the government at PAS. The Court adopted the six-factor fair share allocation test set forth in United States v. R.W. Meyer, Inc., 932 F.2d 568 (6th Cir.1991), and found Cornell liable for six percent of the response costs recovered from Alcan and, thus, the Court awarded Alcan $310,540.92.

On appeal, the Second Circuit affirmed the grant of summary judgment with respect to the imposition of liability against Alcan for response costs at PAS and the finding that Alcan was entitled to contribution from Cornell. See United States v. Alcan, 990 F.2d 711 (2d Cir.1993). However, the Second Circuit reversed the Court's finding that the government was entitled to summary judgment on the issue of damages. See id. In "essentially" adopting the reasoning of the Third Circuit in United States v. Alcan Aluminum Corp., 964 F.2d 252, 267-271 (3d Cir.1992) ("Alcan-Butler"), the court found that the common law scheme of joint and several liability applies to CERCLA. Under this rubric,

where two or more tortfeasors act independently and cause a distinct or single harm, for which there is a reasonable basis for division according to the contribution of each, then each is liable for damages only for its own portion of harm. In other words, the damages are apportioned. But where each tortfeasor causes a single indivisible harm, then damages are not apportioned and each is liable in damages for the entire harm.

990 F.2d at 722 (citing Restatement (Second) of Torts § 433(A)(1965)). The Second Circuit "candidly admitted" that its holding brought causation into CERCLA, a strict liability statute, through the back door, but limited the "special exception to the usual absence of causation" to situations where a defendant's "pollutants did not contribute more than background contamination and also cannot concentrate." Id. Thus, the court held:

Alcan may escape liability if it either succeeds in proving that its oil emulsion, when mixed with other hazardous wastes, did not contribute to the release and the clean-up costs that followed, or contributed at most to only a divisible portion of harm.

Id. (citing Alcan-Butler, 964 F.2d at 270). The court further instructed that Alcan "may present evidence relevant to establishing divisibility of harm, such as, proof disclosing the relative toxicity, migratory potential, degree of migration, and synergistic capacities of the hazardous substances at the site" to show that the harm at PAS was divisible. Id. (citing Alcan-Butler, 964 F.2d at 270 n. 29, 271; United States v. Monsanto, Co., 858 F.2d 160, 172 n. 26 (4th Cir.1988), cert. denied, 490 U.S. 1106, 109 S.Ct. 3156, 104 L.Ed.2d 1019 (1989)). Finally, the court held that if Alcan can show divisibility of harm they must also provide a "reasonable basis for apportionment of liability." Id.

At that time, the case United States v. Alcan Aluminum, 91-CV-1132 ("Alcan-Fulton"), involving clean-up costs at a superfund site in Fulton, New York was also pending before the Court. On December 1, 1993, the Court consolidated Alcan-Fulton with the PAS case.

In May of 1996, the government moved for summary judgment against Alcan on two issues: (1) liability in the Alcan-Fulton case and (2) divisibility of harm and apportionment of costs in Alcan-PAS. Alcan opposed this motion, cross-moved for summary judgment on the same issues and moved to dismiss for lack of subject matter jurisdiction, claiming that CERCLA (1) cannot be applied retroactively and (2) is violative of the Commerce Clause. On October 28, 1996, the Court granted the government's motion for summary judgment with respect to liability at the Alcan-Fulton site¹, denied Alcan's motion to dismiss for lack of subject matter jurisdiction, and reserved decision pending rebriefing on the issues of divisibility and apportionment of harm. See United States v. Alcan Aluminum Corp., 1996 WL 637559 (N.D.N.Y. Oct.28, 1996).

After considering the supplemental briefing submitted by both parties, the Court denied the government's motion for summary judgment; finding that genuine issues of fact existed with respect to the constituents of Alcan's emulsion;² whether the emulsion contributed to the response costs and clean-up; and whether the metals in Alcan's emulsion could have concentrated and, thus, posed an environmental threat. See United States v. Alcan, 1997 WL 727506, at *4 (N.D.N.Y. Aug.20, 1997).

On October 29, 1998, Alcan moved to dismiss the Complaint pursuant to FED. R. CIV. P. 12(b)(6), asserting that the retroactive application of CERCLA is unconstitutional in light of the Supreme Court's decision in Eastern Enter. v. Kenneth S. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998). The Court denied this motion in a Memorandum-Decision & Order dated May 11, 1999. See United States v. Alcan Aluminum Corp., 49 F.Supp.2d 96 (1999).

Cornell was released from this case by a stipulation signed September 29, 1999.

The Court held a bench trial in this action during October 4—8, 1999 to determine whether Alcan could avoid or limit liability.³ At trial, the government argued that Alcan could not avoid liability because: (1) Alcan could not prove that its emulsion, when mixed with hazardous substances, did not contribute to the release or clean-up costs or contributed to a divisible portion of the harm; (2) Alcan's emulsion contained polychlorinated biphenyls ("PCBs"), Volatile Organic Compounds ("VOCs"), and above background levels of metals, which contributed to the release and clean-up costs; and (3) the metals in Alcan's emulsion were capable of concentrating. Alcan, on the other hand, argued that: (1) its emulsion did not contain PCBs, VOCs, or above background levels of metals; (2) the metals did not concentrate; (3) that the legal standard adopted by this Court is incorrect; and (4) it could establish divisibility of harm by looking at the relative toxicity of hazardous substances at the PAS and Fulton Sites and demonstrating that the emulsion contained only background metals that did not concentrate. Alcan did not address the effect of its emulsion as a whole on the response costs at PAS and Fulton; instead, it focused on the individual constituents of its emulsion.

II. Findings of Fact

A. Alcan's Plant and the Hot Rolling Process

Alcan operates a hot mill, including a hot rolling line which processes aluminum ingots⁴ into sheets of aluminum. The process uses an oil and water emulsion to lubricate and cool the ingot and the steel rolls used to reduce the ingot's width. The emulsion picks up fragments of the ingots during the rolling process. Although the emulsion is filtered before disposal, the filtration process does not remove all of the metal fragments. As a result, Alcan's emulsion contains aluminum as well as the impurities in the ingot, cadmium, chromium, copper, lead, nickel, and zinc.

Before the ingot is placed on the hot rolling line, it is heated in "pusher furnaces" (also called homogenizing furnaces or soaking pits). In the 1970s, Alcan cleaned the ingot with 1,1,1, Trichloroethane ("TCA") before placing it in these furnaces. After it is heated, the ingot is placed on the hot rolling line where it passes through an edging mill, two rolling mills, and various shears.

The first rolling mill, the 120 inch reversing mill (the "120 inch mill"), reduces the thickness of the ingot by approximately one half inch each time the ingot passes through. Alcan uses a two to three percent oil⁵ and water...