U.S.A v. Gen. Electric Co.
| Decision Date | 03 December 2010 |
| Docket Number | Case No. 06-cv-354-PB,Opinion No. 2010 DNH 203 |
| Parties | United States of America v. General Electric Company |
| Court | U.S. District Court — District of New Hampshire |
The United States has sued General Electric Company ("GE") pursuant to Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") to recover costs that the United States incurred in responding to soil and ground water contamination at the Fletcher Paint Works and Storage Facility Superfund Site in Milford, New Hampshire.
Following a bench trial, I determined that General Electric is a responsible party under Section 107(a) because it arranged for the disposal of hazardous substances at the site. In an effort to resolve remaining issues and facilitate an appeal, the parties entered into a stipulation identifying the response costs that the parties argue GE will be liable for in the event that my liability determination is affirmed on appeal. The stipulation exempts $1,305, 921 in costs that the United States incurred in connection with removal actions at the site in 1993 and 1995. GE now argues in a motion for partial summary judgment that the government is barred from recovering the exempted costs by the applicable statute of limitations. The United States has filed a cross-motion for summary judgment on the same issue.
In this Memorandum and Order, I determine that the statute of limitations does not prevent the government from recovering the costs it seeks.
I. BACKGROUND
The United States Environmental Protection Agency ("EPA") became actively involved with the Fletcher Paint Works and Storage Facility site in 1988 when it removed hundreds of barrels of hazardous substances from the site and placed a temporary cap over contaminated soils. The site was placed on the National Priorities List of Superfund Sites less than a year later.1
The EPA commenced a Remedial Investigation/Feasibility Study ("RI/FS") in October 1991 and issued a public-comment draft of the RI/FS in December 1996. It undertook several removal actions at the site while the RI/FS was underway. In 1991, it installed a perimeter fence around the property and removed large containers of hazardous substances. In 1993 it repaired the fence, demolished and removed a storage shed contaminated with polychlorinated biphenyl ("PCB"), repaired soil caps covering contaminated soil, tested materials found at the site to determine whether they contained PCB, and transported and disposed of other hazardous substances (collectively "the 1993 Removal Action"). In 1995, the EPA issued a Unilateral Administrative Order ("UAO") requiring GE to remove contaminated soil from adjacent properties, and re-pave a portion of a nearby street (collectively "the 1995 Removal Action").2
The EPA released a Record of Decision in September 1998 and initiated physical onsite construction for a portion of the Remedial Action on December 4, 2000. Thereafter, in July 2001, it issued a UAO requiring GE to implement the Record of Decision. Remedial action is ongoing.
In 1991, the United States filed a complaint against GE and Windsor-Embassy Corporation pursuant to Section 107(a) of CERCLA seeking to recover costs the United States had and would incur in responding to contamination at the site. The United States and GE entered into a consent decree in February 1994 requiring GE to reimburse the EPA for the response costs it had incurred as of April 30, 1993. The consent decree did not include a finding of liability and the United States' request for a declaratory judgment was dismissed "without prejudice to whatever [ ] rights the United States has, including... response costs."
The United States commenced this action on September 20, 2006.
III. STANDARD OF REVIEW
Summary judgment shall be granted if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The evidence submitted in support of the motion for summary judgment must be considered in the light most favorable to the nonmoving party, indulging all reasonable inferences in its favor. See Navarro v. Pfizer Corp., 261 F.3d 90, 94 (1st Cir. 2001).
A party seeking summary judgment must first identify the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the nonmoving party to "produce evidence on which a reasonable finder of fact, under the appropriate proof burden, could base a verdict for it; if that party cannot produce such evidence, the motion must be granted." Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 94 (1st Cir. 1996).
III. ANALYSIS
The statute of limitations for CERCLA claims is governed by a somewhat complex statutory scheme. Section 9613(g)(2) provides that:
An initial action for recovery of the costs referred to in section 9607 of this title must be commenced-
(A) for a removal action, within 3 years after completion of the removal action... and
(B) for a remedial action, within 6 years after initiation of physical on-site construction of the remedial action, except that, if the remedial action is initiated within 3 years after the completion of the removal action, costs incurred in the removal action may be recovered in the cost recovery action brought under this subparagraph.
In any such action described in this subsection, the court shall enter a declaratory judgment on liability for response costs or damages that will be binding on any subsequent action or actions to recover further response costs or damages. A subsequent action or actions under section 9607 of this title for further response costs... may be maintained at any time during the response action, but must be commenced no later than three years after the date of completion of all response action.
42 U.S.C. § 9613(g)(2) (emphasis added).
GE's statute of limitations argument turns on whether the current action is classified as an "initial action" to recover removal costs, which ordinarily must be commenced "within 3 years of the completion of the removal action, "3 or a "subsequent action" for the recovery of such costs, which may be delayed until as late as "3 years after the date of completion of all response action." 42 U.S.C. § 9613(g)(2). If the current action is an "initial action," GE argues that it is time barred because it was filed more than three years after the 1993 and 1995 removal actions were completed. If it is a "subsequent action," GE concedes that the government's claim is timely because all response actions at the site have not yet been completed.
The government contends that the 1991 complaint was the "initial action." Therefore, it argues that the current action is a timely "subsequent action." GE responds by arguing that the 1991 action cannot qualify as an "initial action" because it was resolved by a consent decree that did not include a liability determination that is comparable to "a declaratory judgment on liability for response costs or damages that will be binding on any subsequent action or actions to recover further response costs or damages." 42 U.S.C. § 9613 (g)(2). In short, GE argues that the entry of a declaratory judgment on liability, or some equivalent court order, is a definitional requirement for an "initial action."
The only two circuit courts that have squarely addressed GE's argument have rejected it, see United States v. Findett Corp., 220 F.3d 842, 845-46 (8th Cir. 2000); United States v. Navistar Int'l Transp. Corp., 152 F.3d 702, 709-10 (7th Cir. 1998), and the reasoning that underlies both decisions is compelling.4
Subsection 9613(g)(2) does not expressly make the entry of a declaratory judgment a definitional characteristic of an "initial action." Instead, by establishing the limitation periods that apply to an "initial action" and specifying that a declaratory judgment of liability must be entered in "any such action," Congress suggested that a declaratory judgment on liability is something that must be entered in an "initial action" rather than something that defines such an action. Just as important, the statutory language provides no support for GE's contention that the government is barred from taking advantage of the extended limitations period that applies to "subsequent actions" simply because the court failed to enter a declaratory judgment in the "initial action."
Given the lack of clear guidance in the language of § 9613, it is appropriate to consider whether GE's argument is consistent with the purposes that CERCLA was intended to fulfill. One such purpose is to encourage settlement as a means of avoiding protracted litigation. United States v. DiBiase, 45 F.3d 541, 545 (1st Cir. 1995). Superfund sites take many years to clean up and the work is often done in phases. American Cyanamid Co., 381 F.3d 6, 16 (1st Cir. 2004). Accordingly, the government may be forced to undertake multiple removal actions while the site is studied and a remediation plan is developed. Although it is clearly efficient for a court to conclude an extensively litigated initial cost recovery action with a declaratory judgment on liability that can be used by the government in later actions, requiring the entry of a declaratory judgment in all such cases where the government wishes to take advantage of the extended limitation period that applies to "subsequent actions" would seriously complicate the settlement process by which most removal cost recovery actions are resolved.
As a practical matter, when removal cost recovery actions are filed early in the cleanup process, it will often be impossible for a targeted defendant to estimate its exposure in the event that it is ultimately determined to be a responsible party. Thus, it is extremely unlikely that it will agree to participate in a consent decree and pay the cost of even a minor removal action if it is also required to...
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