U.S. v. Green

Decision Date10 December 1998
Docket NumberNo. 97-CV-0271A.,97-CV-0271A.
PartiesUNITED STATES of America, Plaintiff, v. Kevan M. GREEN and Polymer Applications, Inc., Defendants and Third-Party Plaintiffs, v. Kevin Matheis, Third-Party Defendant.
CourtU.S. District Court — Western District of New York

Denise E. O'Donnell, United States Attorney (Mary K. Roach, of Counsel), Buffalo, NY, United States Department of Justice, Environmental Enforcement Section (Lori J. Schiffer, of Counsel), Washington, D.C., United States Department of Justice, Civil Division, Torts Branch (Gay E. Kang, of Counsel), Washington, D.C., for Plaintiff.

Jeffrey M. Blum, Louisville, KY, for Defendants and Third-Party Plaintiffs.

ORDER

ARCARA, District Judge.

This case was referred to Magistrate Judge Leslie G. Foschio, pursuant to 28 U.S.C. § 636(b)(1), on October 20, 1997. On December 19, 1997, plaintiff United States of America filed motions to strike defendants' affirmative defenses and to dismiss defendants' counterclaim. Also on December 19, 1997, third-party defendant Kevin Matheis filed a motion to dismiss the third-party complaint. On September 30, 1998, Magistrate Judge Foschio filed a Report and Recommendation, recommending that plaintiff's motion to strike the affirmative defenses be granted in part and denied in part; that plaintiff's motion to dismiss the counterclaim be granted and that third-party defendant's motion to dismiss the third-party complaint be granted.

Defendants/third-party plaintiffs filed objections to the Report and Recommendation on October 16, 1998, objecting to the recommendation that their counterclaim and third-party complaint be dismissed. They do not object to that portion of the Report and Recommendation relating to the motion to strike affirmative defenses. On November 9, 1998, the United States and Kevin Matheis filed memoranda in response to the objections. Oral argument on the objections was held on November 20, 1998.

Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions and hearing argument from the parties, the Court adopts all the proposed findings of the Report and Recommendation, including all findings made in the alternative.

Accordingly, for the reasons set forth in Magistrate Judge Foschio's Report and Recommendation, the Court: (1) grants plaintiff's motion to strike the first affirmative defense with leave to replead; (2) grants plaintiff's motion to strike the second and third affirmative defenses; (3) denies plaintiff's motion to strike the fourth affirmative defense; (4) grants plaintiff's motion to dismiss the counterclaim; and (5) grants third-party defendant's motion to dismiss the third-party complaint.

This case is referred back to the Magistrate Judge for further proceedings.

IT IS SO ORDERED.

REPORT and RECOMMENDATION

FOSCHIO, United States Magistrate Judge.

JURISDICTION

This case was referred to the undersigned on October 20, 1997 by the Hon. John T. Curtin for disposition of all non-dispositive motions.1 It is currently before the court on Plaintiff's motions filed December 19, 1997 to strike Defendants/Third-Party Plaintiffs' affirmative defenses (Doc. # 15), to dismiss Defendants/Third-Party Plaintiffs' counterclaim (Doc. # 14), and on Third-Party Defendant's motion to dismiss the Third-Party Complaint (Doc. # 16), filed December 19, 1997.

BACKGROUND

The United States ("Plaintiff") filed this action against Kevan M. Green ("Green") and Polymer Applications, Inc. ("Polymer") (collectively, "Defendants/Third-Party Plaintiffs"), on April 10, 1997, pursuant to Sections 107(a) and 113(b) of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§ 9607 and 9613(b), as amended, to recover costs incurred by Plaintiff in responding to the release or threat of release of hazardous substances into the environment from Polymer's resin manufacturing plant ("the Plant"), located in Tonawanda, New York, in accordance with § 104 of CERCLA, 42 U.S.C. § 9604. Defendants answered the Complaint on September 29, 1997, and filed an Amended Answer on October 15, 1997. In their Amended Answer, Defendants/Third-Party Plaintiffs raise five affirmative defenses and assert a counterclaim against Plaintiff and a cross-claim against Third Party Defendant Kevin Matheis ("Matheis").

The court's scheduling order of November 26, 1997 directed Plaintiff to file any motions to strike the affirmative defenses or to dismiss the counterclaim or third-party complaint by December 19, 1997. Responses by Defendants/Third-Party Plaintiffs were to be filed by January 8, 1998. Also on November 26, 1997, fact discovery was stayed pending the filing and determination of the motions to strike or dismiss.

Defendants/Third-Party Plaintiffs assert as affirmative defenses that (1) there was no release or threat of release of hazardous substances into the environment for which liability may be imposed under CERCLA, (2) any release of hazardous substances at the Plant was not into the environment but, rather, solely into the workplace, (3) many of the hazardous materials detected at the Plant were either of minuscule quantity or had been altered so that they no longer qualified as hazardous substances under CERCLA, (4) Green, despite his ownership and effective control over Polymer, did not engage in any activity for which personal liability may be imposed under CERCLA, and (5) Defendants/Third-Party Plaintiffs did not unreasonably deny the EPA access to the Polymer Superfund Site ("the Polymer Site") and, as such, no penalty may be imposed upon them pursuant to 42 U.S.C. 9604(e).

Defendants/Third-Party Plaintiffs assert as a counterclaim against Plaintiff that the EPA's grossly negligent mismanagement of the Polymer Site during its occupation in connection with the removal and cleanup operations resulted in property damage and conversion of assets. Defendants/Third-Party Plaintiffs also allege a Third-Party Bivens claim against Matheis.2

On December 19, 1997, Plaintiff moved under Fed.R.Civ.P. 12(f) to strike Defendants/Third-Party Plaintiffs' first four affirmative defenses as legally insufficient,3 and to dismiss Defendants/Third-Party Plaintiffs' counterclaim for lack of jurisdiction and for failure to state a claim. Also on December 19, 1997, Matheis moved to dismiss the Third-Party Complaint for lack of jurisdiction and for failure to state a claim.

Defendants/Third-Party Plaintiffs' response to all three motions to strike and to dismiss was filed on January 13, 1998. By letter to the court dated January 16, 1998, Plaintiff requested permission to filed replies with regard to the two motions to dismiss.4 That request was granted and the reply memoranda of law in further support of those motions were filed on February 2, 1998. On February 25, 1998, a corrected copy of Plaintiff's reply memorandum of law in further support of the motion to dismiss the counterclaim was filed. Oral argument was deemed unnecessary.

Based on the following, Plaintiff's motion to strike Defendants/Third-Party Plaintiffs' affirmative defenses should be GRANTED in part and DENIED in part; Plaintiff's motion dismiss Defendants/Third-Party Plaintiffs' counterclaim should be GRANTED; and Third-Party Defendant's motion to dismiss the Third-Party Complaint should be GRANTED.

FACTS5

In 1968, Green commenced operation of a phenolic resin manufacturing business known as Polymer Applications in Tonawanda, New York ("the Polymer Site"). Green became President and sole shareholder of Polymer Applications at the time it was incorporated in 1972, when it became known as Polymer Applications, Inc. ("Polymer"), until the present. Green and Polymer are the entities that appear as Defendants/Third-Party Plaintiffs in this action.

In connection with its resins manufacturing operations, Polymer stored hazardous substances in drums, tanks and other containers at the Polymer site. On July 3, 1988, the Plant was heavily damaged by a fire. Following the fire, Polymer continued its resin manufacturing activities on a limited basis until March 1989 when it ceased operations. The chemicals stored at the Plant, as well as finished products, drums and tanks, remained at the site following the fire and cessation of Polymer's business operations.

Between 1968 and 1988, the New York State Department of Environmental Conservation ("DEC") documented a number of releases of hazardous substances at the Polymer Site. In 1981 and 1988 the DEC issued Consent Orders to Polymer, thereby citing Polymer for chemical discharges. In 1990, the DEC began a state-funded investigation of the Polymer Site. A DEC Remedial Investigation and Feasibility Study ("RI/FS") of the Polymer Site was prepared in 1993. The DEC investigated detected hazardous substances leaking from tanks and drums on the Polymer Site. Based on these leaks, on March 10, 1994, the DEC verbally requested that the Environmental Protection Agency ("EPA") perform hazardous substance removal actions at the Polymer Site. A formal written request was made on March 14, 1994. On March 14, 1994, pursuant to CERCLA, 42 U.S.C. §§ 9601 et seq., and the National Oil and Hazardous Substances Pollution Contingency Plan ("NCP"), 40 C.F.R. Pt. 300(E) the EPA initiated a preliminary assessment and removal activity at the Polymer Site. The EPA assigned Matheis as the On-Scene Coordinator ("OSC") of the CERCLA removal action at the Polymer Site. As the OSC, Matheis was responsible for directing the federally-funded environmental response efforts and to coordinate the clean-up operation at the Polymer Site.

Matheis' first duty as OSC was to conduct a preliminary assessment of the Polymer Site. The...

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