U.S. v. Outboard Marine Corp.
| Decision Date | 22 May 1986 |
| Docket Number | No. 85-1584,85-1584 |
| Citation | 789 F.2d 497 |
| Parties | , 4 Fed.R.Serv.3d 1213, 16 Envtl. L. Rep. 20,708 UNITED STATES of America, Plaintiff-Appellee, and The People of the State of Illinois, Intervenors-Appellees, v. OUTBOARD MARINE CORP., Defendant, Third-Party Plaintiff and Cross-Claim Defendant-Appellant, and Monsanto Company, Defendant, Third-Party Defendant and Cross-Claim Intervenor-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Richard J. Phelan, Phelan, Pope & John, Robert E. Shapiro, Kirkland & Ellis, Chicago, Ill., for appellants.
James P. White, Asst. U.S. Atty., Anton Valukas, U.S. Atty., Chicago, Ill., for appellee.
Before BAUER and COFFEY, Circuit Judges, and ESCHBACH, Senior Circuit Judge.
The appellants, Outboard Marine Corporation ("OMC") and Monsanto Company ("Monsanto") appeal a district court order granting the motion of the United States and the State of Illinois dismissing their action against the appellants without prejudice, pursuant to Fed.R.Civ.P. 41(a)(2), 1 on the condition that the United States and State of Illinois agree to execute a covenant not to again sue the appellants for injunctive relief. We affirm.
This case has a lengthy and tangled history spawning numerous decisions by this and other courts. See Outboard Marine Corp. v. Illinois, 453 U.S. 917, 101 S.Ct. 3152, 69 L.Ed.2d 1000 (1981) (Mem.); Outboard Marine Corp. v. Thomas, 773 F.2d 883 (7th Cir.1985); State of Illinois v. Outboard Marine Corp., Inc., 680 F.2d 473 (7th Cir.1982); State of Illinois v. Outboard Marine Corp., 619 F.2d 623 (7th Cir.1980). It is unfortunate that we are unable to write the final chapter at this time and thus the conclusion of this case will have to await another day.
OMC manufactures outboard motors, industrial and turf care vehicles at its industrial complex located adjacent to the Waukegan Harbor in Waukegan, Illinois. In 1976, the government determined that an estimated 1.1 million pounds of polychlorinated biphenyles ("PCB") rested on the bed of the harbor and were caused by fluids discharged from the OMC plant. Monsanto had been selling the PCB based fluids to OMC for use in its production and manufacturing process.
In March, 1978, the United States Government filed a civil lawsuit against OMC requesting mandatory injunctive relief under the Refuse Act, 33 U.S.C. Sec. 407 (Count I), the Clean Water Act, 33 U.S.C. Sec. 1251 et seq. (Count II) and the federal common law tort of nuisance. The government sought to compel OMC to remove the PCB sediments from the Waukegan Harbor. In November, 1978, OMC filed a third-party complaint against Monsanto seeking contribution and indemnity if OMC was required to remove the PCB sediments. Subsequently, the United States amended its complaint in 1980 to include Monsanto as a defendant and at this time the State of Illinois was granted leave to intervene as a plaintiff in this action. 2
In December, 1980, the President signed into law the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") 42 U.S.C. Sec. 9601 et seq., better known as the "Superfund" Act, authorizing the Environmental Protection Agency ("EPA") to take action to clean up hazardous waste sites. Pursuant to section 106 of CERCLA, 42 U.S.C. Sec. 9604, the EPA is authorized to file an action in federal court to "secure such relief as may be necessary" if the agency "determines that there may be an imminent and substantial endangerment to the public health or welfare or the environment because of an actual threatened release of a hazardous substance from the facility...." On January 6, 1982, the EPA filed its amended complaint including, along with its other claims based on the federal statutes and federal common law theories of liability, a claim under section 106 of CERCLA requesting that the court order OMC and Monsanto to remove the PCB from the Waukegan Harbor. In September of 1982, in response to the appellants' request for admissions of fact, the government stated that it had no scientific concrete proof, at that point in time, that the PCB in the Waukegan Harbor had caused harm to any human being. It is important to note that the government did not admit that the PCB would not present a potential threat to human beings in the future; nor did the government admit that the PCB in the harbor would not pose a risk of future significant environmental damage to the environs of the harbor, Lake Michigan and the fish and aquatic life in that area. 3
On May 24, 1982, the district court granted OMC's and Monsanto's motion to dismiss the federal common law nuisance claims in light of the Supreme Court's decision in Milwaukee v. Illinois, 451 U.S. 304, 101 S.Ct. 1784, 68 L.Ed.2d 114 (1981) (), and granted Monsanto's motion to dismiss all other claims of the United States against Monsanto. See United States v. Outboard Marine Corp., 549 F.Supp. 1032 (N.D.Ill.1982). The district court refused to dismiss the Refuse Act and the Clean Water Act claims against OMC (Counts I and II) holding that these statutes authorized the government to seek injunctive relief for the removal of the hazardous substances, such as PCB, from the Waukegan Harbor. See United States v. Outboard Marine Corp., 549 F.Supp. 1036 (N.D.Ill.1982). The district court also refused to dismiss the section 106 CERCLA claim against OMC. United States v. Outboard Marine Corp., 556 F.Supp. 54 (N.D.Ill.1982). 4
On November 10, 1982, OMC filed a motion requesting the district court to reconsider its order denying OMC's motion to dismiss the Refuse Act, the Clean Water Act and the Section 106(a) CERCLA claims. In response to this motion, the district court judge noted that she had "about a sixty percent comfort in my prior opinion" and set a hearing date on OMC's motion. District Court Hearing November 12, 1982 at 12-13.
Subsequently, in December, 1982, the EPA published its initial National Priority List ("NPL") and ranked the Waukegan harbor 82nd of 540 hazardous waste sites included on the NPL. Shortly thereafter the State of Illinois designated the Waukegan harbor as its top priority "Superfund" site. 5 At this time in the litigation history of this case, the United States determined that given the amount of discovery still to be completed before trial, and the fact that the anticipated lengthy trial and the subsequent appeal "will likely delay the implementation of remedial work at the OMC site and in Waukegan harbor for an additional three to four years," the most expeditious manner in which to clean up the PCB now resting on the bed of the Waukegan harbor would be for the government to remove the PCB, as authorized by section 104 of CERCLA, 42 U.S.C. Sec. 9604, and later sue for the removal and cleanup costs pursuant to section 107 of CERCLA, 42 U.S.C. Sec. 9607. On February 25, 1983, the United States filed a motion with the court to dismiss its claim under section 106 of CERCLA without prejudice; and on March 22, 1983 the government filed a motion requesting that the court stay the remainder of injunctive relief action pending the completion of the EPA administrative proceedings under CERCLA. The appellants objected to the stay and the proposed dismissal of the action without prejudice contending, as they do on appeal, that the true reason the government commenced the administrative proceedings under CERCLA was that it would be unable to establish its claims at trial. Subsequently the parties agreed to ask the district court to stay the consideration of these motions until after the EPA had issued its final plan concerning the proposed cleanup of the Waukegan harbor. The district court granted the motion to stay the proceedings. During the next year, from March, 1983 to May, 1984, the EPA proceeded with its administrative hearings and procedures, and conducted feasibility studies into the cleanup of the Waukegan harbor. 6 On May 15, 1984, the EPA issued its Record of Decision ("ROD") selecting as the appropriate remedy (given the limited availability of federal funds) a $21 million removal effort involving the dredging of the harbor with both off-site and on-site storage of the PCB contaminated sediments. 7 On May 21, 1984, approximately one week after the issuance of the ROD, the United States filed a motion with the district court, pursuant to Fed.R.Civ.P. 41(a)(2), requesting that its complaint be dismissed without prejudice as it had decided that when balancing the years of anticipated litigation concerning the issue of injunctive relief against the need for immediate removal of the PCBs from the harbor, the scales of justice were definitely tilted in favor of the government proceeding without delay to remove the PCB pursuant to the authority granted the government in CERCLA section 104 and later sue for reimbursement of the removal costs under CERCLA section 107. Both OMC's and Monsanto's briefs, filed with the court opposing the motion to dismiss, argued that it would be improper to dismiss the case without prejudice at this late stage in the litigation given the amount of money already expended in preparation for trial; they also attacked the proposed remedy recommended in the EPA's R.O.D. and the alleged weakness of the government's evidence as to the harm caused by the PCB. OMC and Monsanto requested the court to either set the case for trial on the issue of the alleged harm caused by the PCB and the cost-effectiveness of the proposed solution or, in the alternative, dismiss the case with prejudice.
The district court determined that "[t]his litigation undoubtedly has been very costly for the parties to litigate" and thus "[t]he United States should...
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